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Document | 
No. 491 I 



IRADE AGREEMENTS ABROAD 



ARTICLES 

RELATING TO 

THE RESOLUTION (S. 220) "REQUESTING THE PRESIDENT TO 
ASCERTAIN CERTAIN INFORMATION RELATING TO A RECENT 
COMMERCIAL CONFERENCE HELD IN PARIS, FRANCE. BY 
CERTAIN EUROPEAN NATIONS," TOGETHER WITH THE RE- 
MARKS OF SENATOR WILLIAM J. STONE AND SENATOR 
HENRY CABOT LODGE DELIVERED IN THE UNITED STATES 
i SENATE THEREON AND THE MESSAGE OF THE 

PRESIDENT IN RESPONSE THERETO 




WASHINGTON 

GOVERNMENT PRINTING OFHCE 

1916 



ZD635" 
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SUBMITTED BY MR. STONE. 



In the Senate oe the United States, 

July 7 {calendar day, July 10), 1916. 

Ordered, That certain articles on trade agreements abroad relating to tlie 
resolution of the Senate of June 29, 1916, requesting the President to ascer- 
tain certain information relating to a recent commercial conference held in 
Paris, France, by certain European nations, together with the remarks of 
Senator William J. Stone and Senator Henry Cabot Lodge thereon, and the 
message of the President of the United States in response thereto, be printed 
as a Senate document. 

Attest : \ 

- James M. Baker, Secretary 

2 



D.- o\ ..v„ 
AUG 8 1916 



TEADE AGEEEMENTS ABEOAD. 



REMARKS OF SENATOR WILLIAM J. STONE DELIVERED IN THE 
SENATE JULY 10, 1916. 

Mr. Stone. Mr. President, I ask the Senator in charge of the Agri- 
cultural appropriation bill to allow me a few moments to present a 
(question I deem to be of grave international import, and to ask that 
certain documents I have on my desk may be printed as a public 
document. 

I have put in as brief form as I could what I desire to say to the 
Senate, and I should like to have, if I can, the considerate attention 
of the Senate. What I am about to say relates to Senate resolution 
220, which I presented June 29, and which was agreed to on the fol- 
lowing day. The resolution relates to the recent economic conference 
or convention held in Paris. 

Mr. Brandegee. Mr. President, will the Senator from Missouri be 
kind enough to state the number of the resolution which he is dis- 
cussing ? I did not catch it. 

Mr. Stone. I am addressing my remarks to Senate resolution 
No. 220. 

Mr. President, all of us are deeply sensible of the horrors incident 
to the great war in Europe. It would be useless for me to dwell upon 
that. I do not know, nor do you, how this mighty struggle will 
eventuate. No doubt we entertain individual opinions as to that, but 
such opinions are of necessity speculative and uncertain; moreover, 
it would not be thought to be the proper thing for any of us in this 
presence and at this time to express an opinion on that subject. All 
that we can assert is that sometime in the not distant future this 
stupendous butchery of men — men representing what is of the best 
in our Christian civilization — must end. To be sure whatever this 
great neutral Nation of ours may properly do to hasten that end 
should be done, and no doubt will be done. But my present purpose 
does not lead me into that consideration. For the present my eye is 
upon the end of the conflict, whenever and however that end may 
come. My eye is fixed upon the possible, may I not say probable, 
consequences of that end upon the well-being of this country. I am 
for the present confining my vision to our own horizon. Already the 
great nations engaged in this struggle have, as we know, reached a 
point of great embarrassment to all of them — financially, indus- 
trially, economically. If the war should go on to a bitter end — • 
that is, to a final arbitrament of armed strength and endurance — the 
embarrassment alluded to will of necessity be enormously increased. 

After it is all over what will the party victorious do, or be inclined 
to do. and in what way may the post-bellum policies of the victorious 
partv affect our country and people? Of late I have been observ- 

3 



4 ■ TKADE AGEEEMEXTS ABEOAD. 

ing various things bearing upon this question. The things I liave 
been observing relate to the possible policies of the victor, who- 
ever that may be, when the doubtful issue of victory has been 
decided. Whether from the standpoint of the central — Germanic — 
powers or from the standpoint of the entente allies, it follows in- 
evitably that whatever they have in naind to do is — at least, in large 
measure — dependent upon the final outcome of the struggle. The 
defeated party will likely have little to say ; the victorious party will 
have much to say. 

Mr. President, ought not we to be giving serious thought and 
attention to the outline of policies — the tentative, conditional 
policies — of these combatant nations as these outlines come to us? 
What does Germany have in mind to do in a commercial way if her 
arms should compel her enemies to yield ? And what will the great 
powers of the entente alliance have in mind to do if victory should 
rest in the end upon their banners ? I am not for the moment con- 
cerned about maps, about territorial changes, about successions to 
thrones, about governmental autonomies. I have in mind the things 
that may directly and immediately concern the material welfare of 
this country in particular, and in a larger sense of this hemis- 
phere in general. It is not my present purpose to discuss these 
questions at length or with particularity of detail ; perhaps we have 
not yet reached the point where that can be done advisedly. I wish 
merely to call passing and urgent notice to some of the things that 
have challenged my thought and attracted my attention. 

First, let it be supposed that Germany should be the victor. What 
would the German policy be with respect not only to her enemy 
belligerent nations, but with respect to the world at large? 

Of course I can not answer this question satisfactorily, much less 
authoritatively. Still some things come to us it is worth while to 
take note of. Among other things to which my attention has been 
called is an article written by Gustaf Sioesteen — written in Berlin 
and printed in a Swedish publication. From that article I wish to 
make the following significant quotation : 

A commencement of this new economical connection is being made by the 
negotiations entered on by representatives of Austria-Hungary and Germany 
concerning the proposed formation of a customs union. Since this union wouhl 
include 120,000,000 individuals, it must be evident what an immense attraction 
it must exert on the surrounding smaller nations. Switzerland and Holland 
can scarcely escape this attraction, and the Scandinavian countries, it is said, 
would probably find it to their advantage, together with a liberated Finland, 
to form a northern customs union, which later, on an independent basis, could 
enter in close union with the vast " ZoUverein " of central Europe. 

This " ZoUverein " would then include about 17.5,000,000 individuals. The 
adhesion of Italy to the vast union would not be inconceivable, and then the 
combination of the United States of Europe, founded on a voluntary commercial 
union, would be approaching its realization. 

Such a commercial union, embracing various peoples, could only lead to 
moderation in foreign politics and would be the best guaranty for the peace 
of the universe. A brisk interchange of commodities, a fruitful interchange of 
cultural ideas, would result from such a union, connecting the polar seas with 
the IMediterranean and the Netherlands with the steppes of southern Russia. 

Of course this is not official or in any sense authoritative, but I 
have some good reason, although I do not feel at liberty to state the 
grounds of that reason, to believe that it is in some large way 
expressive of German governmental policy. That is all I care to 
say at this time on that subject. If true, it is very important. 



TEADE AGREEMENTS ABROAD.' 5 

I turn now to the other side — that of the entente allies. Whatever 
may be said about the German polic^^ following the war — and as to 
that, is must be admitted, our information, at least so far as I have 
information, is somewhat nebulous and uncertain — the allies have 
given us a more definite cue as to their policy. Some months ago a 
movement was set afoot for the holding of an economic or commercial 
conference between the principal nations associated in what is known 
as the entente alliance. The proposal for such a congress was ex- 
tensively discussed in Great Britain, France, and other countries. 
My attention has been called to a discussion had in the British House 
of Lords concerning this congress antedating the meeting thereof, 
and I have read various articles expressive of British public opinion 
I'elating to the subject appearing in the leading trade and commercial 
publications of that and other countries. I can not, of course, speak 
with assurance; but, reading and attempting to digest many of these 
things, I can not escape the belief that these war-involved and so- 
called allied nations have in mind a mutual policy to accomplish 
certain results beneficial to themselves and that may not be in accord 
with the interests of this country. 

Primarily it appears to be the chief mutual purpose of these allied 
nations to wage a commercial war against Germany after Germany 
has been defeated on the field of physical combat. As to that there 
has been no attempt to disguise their purpose; but, as I have gone 
along reading the various discussions which have come under my 
notice, I am impressed with the apprehension that there may be, and 
probably is, a purpose having a larger reach. 

There is talk of an international understanding between them 
that the allied powers, after the war, would work with each other 
and for themselves as against not only Germany but the balance 
of the world. There is much talk of fiscal and economical policies 
looking to that end, the underlying purpose being to aid each other 
in recouping and rehabilitating themselves. I am impressed with 
the notion of a purpose and tendency toward a close and somewhat 
exclusive commercial and industrial union of that character. 

I wish to read at this point a brief extract from a speeech re- 
cently deliA^ered by the Right Hon. William Morris Hughes, the 
Australian premier and one of the dominating men in carrying for- 
ward the British policy. It is a somewhat remarkable thing that a 
man from far-away Australia, who has reached supreme power in 
that self-governing colony, should go to London and in the Parlia- 
ment and on public opinion in the United Kingdom exert an in- 
fluence that can hardly be second to that of any other man. He 
must be a man of great force. He was one of the leading men rep- 
resenting the British Empire at this Paris conference. Here is what 
he said, outlining his view of the general policy of the country for 
which he spoke — patriotically spoke: 

Then we have to prepare to meet the demand for machinery, ships, goods of 
all kinds which have either been destroyed by the war or which could not be 
manufactured during the war. We have to retain our hold on the sea-carrying 
trade and to dispose of oiu- products in the markets of the world. The central 
powers have recently entered into a very close economic alliance, and Germany 
is using all its genius for organization to make it effective. Then, the neutral 
nations, growing rich while we grow daily poorer, are making great prepara- 
tions to capture the world's markets and oust us from our position. All these 
things confront us. We must face them, and we must master them. And I 
am quite sure we can do so if we but go the right way to work. 



6 TKADE AGREEMENTS ABEOAD. 

The oiilv possible solution of the great problem lies in organization. We 
must not only put energy into the work, but brains— the best brains of the 
country. And we must call science to our aid. 

The material basis of every industry is its raw material. AVithout this, 
industry is helpless. The Paris conference sets out the position in one of 
its resolutions. Common sense and our own bitter experiences have made 
us realize how vital to national safety and welfare the raw materials of our 
basic industries are. We have seen what the control of dyes, tungsten, spelter^ 
and other metals by Germany means to this nation. It is profoundly true 
that if one great power controlled practically all the supplies of such things 
as copper, lead, zinc, tungsten, petrol, rubber, and cotton all the world would 
be suppliant at its feet. 

Perhaps we would have no well-founded right to quarrel with these 
nations if what is suggested should turn out to be the absolute truth. 
They have suffered together, and together have seen their vast 
accumulations wasted, to say nothing of their losses in life and losses 
in other ways. Perhaps it 'would be only natural for these nations, 
being victorious in the war, to turn a cold, icy face to America and 
all the balance of the world, crush Germany industrially as well as 
physically, and join in a common effort to rebuild their shattered 
fortunes by some form of concerted action without deference to other 
nations. 

Mr. President, I think a policy of that kind would be shortsighted, 
resulting in retaliatory measures, and that the wounded nations would 
suffer must if they entered upon a struggle of that kind against the 
neutral nations of the world w^ho might be most helpful in a time of 
such dire stress, and when the friendship of strong nations — ^nations 
opulent in every way and capable of aiding in every way — should be 
at the side of all the combatants to aid them instead of being driven 
into an unwilling enmity against any of them. But their views and 
ours may not be in accord. 

Mr. President, I think this is as far as I care to go into this subject 
at this time. I shall conclude for the present by asking the unani- 
mous consent of the Senate to print as a public document certain 
papers I hold in my hand bearing on this general subject, to which I 
respectfully invite the attention of m}^ colleagues and of the country. 
I also ask that the remarks I have just made may be printed as a sort 
of explanatorv introduction to this public document and as a part 
of it. 

Mr. President, these papers, to which I have but barely alluded, 
contain, as I think, a great fund of valuable information to the 
Senate, to the Congress, and to the country. I should like to have 
the matter printed in the way I have suggested — as a public docvi- 
inent — and I ask that the papers may be printed in the order in which 
I have arranged them. 

Mr. Gallinger. Mr. President, if the Senator please 

Mr. Stone. I am through. 

Mr. Gallixger. May I ask the Senator if the documents relate to 
economic questions exclusively and to the apparent purposes of the 
combatant nations of Europe ? 

Mr. Stone. Oh, absolutely. 

The Vice President. Is there any objection to the request of the 
Senator from Missouri ? The Chair hears none. 

Mr. Stone. I understand permission is given to have the document 
printed. 

The Vice President. Yes. 



REMARKS OF SENATOR HENRY CABOT lOBGE DELIVERED IN 
THE SENATE JULY 10, 1916. 

Mr. Lodge. Mr. President, the Senator from Missouri [Mr. Stone], 
in what he has said, and which lias so much interested, as it ought to 
interest, the Senate, has considered the possibilities of what may 
happen, first, in the case of the victory of the central powers and, 
second, in the case of the victor}^ of the allied powers, as they are 
called. This resolution, however, relates only to the conference said 
to have been held in Paris. It relates only to the possible action of 
the allies. I think it extremely desirable that, as the Senator from 
Missouri himself has said, we should have also any information that 
can be had from the State Department with relation to the possible 
action of the central powers. 

This resolution should not be confined to what the allied powers 
intend to do at the close of the war but it should give us every pos- 
sible information as to what Germany and Austria propose to do, so 
far as can be learned from the utterances of their public men and 
from writings of authority, such as that quoted by the Senator from 
Missouri. 

That there is such information about the designs of the central 
powers is shown by what the Senator from Missouri has read. I 
think that it is very important that we should know the intentions 
of both sides, so far as they can be known. 

The resolution, it will be observed, deals only with economic ar- 
rangements. The Senator from Missouri said that he was not con- 
cerned with maps, by which I understood him very properly to meam 
that he was not concerned with what may be called the political 
aspects of the war, or with the treat}^ between Russia and Japan, 
which has been announced, and which we have reason to understand 
is a political and not an economic agreement. 

I am sure, Mr. President, that we ought to have all the informa- 
tion we possibly can get in regard to every phase of the economic 
situation. At this time, of course, that situation must be very largely 
matter of pure speculation. All that we absolutely know is that the 
greatest war which has ever afflicted mankind has been raging for 
two years in Europe, and that, whatever its physical and political 
results may be, such a convulsion can not but bring in its train, when 
peace comes, enormous economic changes. What the various powers 
will do when peace comes, whether defeated or victorious, no man 
can accurately say; but we ma}^ be perfectly certain that they will 
devote every effort to restoring normal conditions, and to bringing 
back as rapidly as possible— and it will be a slow process at best — 
sound economic conditions in their respective countries. That they 
will attempt legislation or agreements for that purpose I think is not 
an unreasonable inference : but what concerns us in the United States 
and alone concerns us is to be as well prepared as we can be for a 

7 



8 TKADE AGREEMENTS ABROAD. 

future which necessarily can not be known, but about which we can 
only guess. We know that the results will be of the most far-reach- 
ing character, and beyond that we can only conjecture. 

It seems to me, Mr. President, that the only wise course for this 
country is, so far as possible, to be prepared for any contingency. 
There are two forms of preparation — what I may call the physical 
and the economic. I am very deeply convinced of the necessity of 
such preparation on the physical side as to make the application of 
force and violence to the United States as remote as possible. I wish 
such preparation had been begun long ago. It is .not too late even 
now, although much precious time has been lost, and we ought to 
make every possible preparation for our own defense, both by sea 
and by land. I believe that we are about to make suitable prepara- 
tion by sea. I wish I could say the same as to our preparation by 
land. But the physical preparation is, comparatively speaking, 
simple. We must have such an armament for defense as will secure 
our own peace; as will be sufficient to make it apparent to all the 
world that we are not to be attacked with impunity by anybody, 
either on our Pacific or our Atlantic coasts. Into this question of 
physical defense and preparation I do not care to enter further at 
this moment. When the naval bill is before the Senate I shall ven- 
ture to say something further upon this point. 

Now, as to the industrial situation : We know that the temporary 
prosperity, so called, due to the vast expenditure of foreign money 
in this country during the last two years, is wholly artificial and 
unreal. We knoAv it can not last. The purchases for foreign account 
are said to be declining already, owing to the fact that the allies at 
least are now largely supplying their own needs. Those vast expend- 
itures by foreign governments in this market will cease; they will 
eease absolutely on the coming of peace, and we shall find ourselves 
in a world in which we know this to be certain, that the purchasing 
power of the nations who have hitherto bought of us largely in 
normal times will have been immensely diminished. We shall also 
iind ourselves in a world where capital has been destroyed in unheard 
of amounts, where industry has been paralyzed, and where all the 
stricken countries will be working in desperation to restore their 
industrial fortunes. These conditions, at least, we know we shall 
have to meet. 

We must be prepared in this direction also hj what is gen- 
erally referred to as industrial organization. Into the details of 
this organization of our industries it will be impossible at this 
moment to enter; but I will say this much, and I say it without 
any party suggestion, because I think I am stating a general prin- 
ciple, that if we are to meet some of the international combinations 
which are likely to occur, if we are to be able to meet some of the 
tariffs which are likely to be imposed, we must remember that the 
great weapon in our hands is the fact that we have the best market 
in the world both for import and for export, and that if we keep that 
weapon sharp and bright, if we hold it with a strong hand, the 
nations of the world will think twice before they throw that market 
away or attempt to destroy exports which are essential to their being. 

That they will try to close the gates of trade and commerce upon 
•as in many directions I regard asliighly probable, although the aim 



TRADE AGREEMENTS ABROAD. 9 

and extent of the effort must remain at present a matter of specula- 
tion. But if we are to meet this situation successfully, we must 
be prepared economically and industrially as I believe we should be 
prepared physically and in arms. To this end the essential thing is 
so to organize our industries that they will be strong, independent, 
and ready for the conflict when and if it comes. Certainly, in order 
to organize the industries, in order to make them a bulwark and a 
barricade against the economic struggles we may have to face, the 
first thing that is necessary is not to cripple but to encourage them. 
We must try to put them in such a condition so that they can stand 
behind the people and the Government, be able to meet any test, and 
make the world clearly understand, as we must make them under- 
stand in the matter of armaments, that we can not be invaded, either 
physically or economically, with impunity. 

Such, Mr. President, seems to me the true, the vital policy to be 
followed by this country in both directions. The first obvious step 
is that we should have all the information that it is possible and 
proper to give us now or later, not only as to one group of belliger- 
ents, but as to the purposes and intentions of all the nations now 
engaged in war. 



ARTICLES PRESENTED BY SENATOR STONE PERTAINING TO 
SENATE RESOLUTION NO. 220. 

[New York Times, Jan. 26, 1916.] 

The Trade War Danger. 
America's position in the face of German and British plans. 

I'd the Editor The New York Times : 

Your editorial on " International competition " will naturally be 
considered in connection with the Washington dispatch, which was 
first published in the Times last December, and which stated that 
England proposed to hold German shipping in leash even at the 
end of the war while further terms were discussed. In the House 
of Commons a more recent statement by Mr. Eunciman and the 
ensuing debate have emphasized the significance of these matters. 
These dispatches and your editorial deserve to be studied, particu- 
larly in relation to an article translated from an obscure Swedish 
paper in November, 1914, which was published in the Times Current 
History Magazine, April, 1915. This article, " "V\niat the Germans 
desire," was, I believe, inspired by the highest authorities in Ger- 
many. That it should have wandered to Scandinavia, and thence 
to Current History, is another story. But at that time it at once 
attracted official attenion in England. The result is, perhaps, seen 
in the Washington dispatch of last December. For the gist of the 
article in Current History is the general plan of a central European 
ZoUverein as it was probably worked out by the German foreign 
office. Mr. Brailsford in the New Republic of January 8, 1916, has 
a characteristically interesting and ineffective article on this subject. 

But the main point is that this aspect of foreign policy deserves 
the most carfeul study and attention by Americans. We are ex- 
posed by these two programs to a German determination by use 
of tariffs after the peace to control the commerce of a vast area in 
Europe, and perhaps in other parts of the world. We have also 
to consider the effect on our imports and exports of the British 
plan. Whichever side wins, whether or not the war ends in a dead- 
lock, two things stand out clearly now. The Germans said, in 
October, 1914, if we can't win on the field we will win by organiza- 
tion and by tariffs, and they optimistically included the statement 
that at the end of this war " the world would have to reckon with 
only two first-class powers, viz., Germany and the United States 
of America." The English, on the other hand, now say that by 
control of the seas they will meet this possibility. In any event, 
it is important for us to study the documents and to consider the 
facts. The Government at Washington, our economic students, and 
the directors of our business are undoubtedly investigating the mul- 
titude of elements and phases which belong to these problems. Cer- 
10 



TEADE AGREEMENTS ABEOAD. H 

tainly the questions involved are alive in the minds of many Ameri- 
cans. Unless we are ready and determined to take care of ourselves, 
we don't deserve to play a real part in this matter. For we are in 
for a long game, and a difficult game. 

Alfred L. P. Dennis. 
Madison, Wis., January W^ 1916. 



Indications of German Post-Bellum Policy. 

what the germans desire — not conquest, but a new economical 

system of europe. 

[By Gustaf Sioesteen.] 

(The subjoined letter from Berlin, published originally in the Swedish Goteborgs Handels- 
Tidnung of October 26, 1914. was immediately translated by the British Legation in Stock- 
holm — that is, the official English translation — and sent by the legation to Sir Edward 
Grey. The New York Times Current History is informed from a trustworthy source that 
the article is interpreted in London as expressing the real aims of Germany at the end of 
the war, should that power be successful. The founding of a commercial United States of 
European States would be, according to this interpretation, the purpose of Germany at the 
conclusion of a victorious war. The passage in the Berlin correspondent's letter declaring 
that only such an enormous central European customs union, in the opinion of leading 
German statesmen, " could hold the United States of North America at bay " in order 
that, after this present war, the " world would only have to take into account two first- 
class powers, viz, Germany and the United States of America," is of peculiar interest to 
Americans. ) 

Berlin, October 21. 

Counting one's chickens before they are hatched is a pardonable 
failing with nations carrying on war with the feeling that their all 
is at stake. When sorrow is a guest of every household, when mone- 
tary losses cause depression, and the cry arises time after time, 
" What will be the outcome of all this ? " then only the fairest illu- 
sions and the wildest flights of fancy can sustain the courage of the 
masses. 

These illusions are not only egotistical, but, curiously enough, 
altruistic, since mankind, even when bayoneting their fellow crea- 
tures, want to persuade themselves and others that this is done merely 
for the benefit of their adversary. In accordance with this idea, in 
the opinion of all parties, the war will be brought to an end with an 
increase of power for their native country, as also a new Eden pre- 
vail throughout the whole civilized world. 

The enemies of Germany, though they have hitherto suffered an 
almost unbroken series of reverses in the war, have already thor- 
oughly thrashed out the subject as to what the world will look like 
when Germany is conquered. In German quarters the press has like- 
wise painted the future, but the following lines are not intended to 
increase the row of fancy portraits, but merely to throw light on 
what is new in the demands conceived. 

My representations are founded on special information, and I deem 
it best to make them now, when the most fantastic descriptions of the 
all-absorbing desire of conquest on the part of Germany have circu- 
lated in the press of the entire world. 

Among other absurdities it has been declared that Germany in- 
tends to claim a fourth of France, making this dismembered country 
a vassal State, bound to the triumphal car of the conqueror by the 
very heaviest chains. It is incredible, but true, that such a statement 



12 TRADE AGREEMENTS ABROAD. 

has been made in the press by a Frenchman, formerly president of 
the councih 

In direct opposition to the fictitious demands of the Germans, I 
can advance a proposition which may sound paradoxical, viz, that 
the leading men in Germany, the Emperor and his advisers, after 
bringing the war to a victorious issue, will seriously seek expedients 
to avoid conquests, so far as this is compatible with the indispensable 
demands of order and stability for Europe. 

First, as regards France. The entire world, as also the Germans, 
are moved to pity by her fate. Germany has never entertained any 
other wish than to be at peace with her western frontier. A con- 
siderable portion of France is now laid waste, and in a few weeks mil- 
lions of vSoldiers will have been poured into still wilder portions of this 
l3eautiful country. On what are the inhabitants of these French 
Provinces to exist when the German and French armies have requi- 
sitioned everything eatable? Germany can not feed the inhabitants 
of the French Provinces occupied, nor can the Belgians do so, I 
imagine, for the provisions of Germany are simply sufficient for their 
own needs, England preventing any new supply on any large scale. 

This is a totally new state of things in comparison with 1870, 
when Germany was still an agrarian country and had, moreover, a 
free supply on all her frontiers. 

Can the French Government allow a considerable portion of their 
own population actually to starve, or be obliged to emigrate to other 
parts of France, there to live the life of nomads at the expense of 
England, while the deserted provinces are given over to desolation? 
The idea prevails here that the French will compel their Government 
to enter on and conclude a separate treaty of peace when the fatal 
consequences of the war begin to assume this awful guise. England 
does not appear to have considered that this would be the result of 
her system of blockades. 

The German conditions of peace as regards France will be gov- 
erned by two principal factors with respect to their chief issues. 

The "first is the complete unanimity of the Emperor and the 
chancellor that no population, not speaking German, will be incorpo- 
rated in the German Empire, or obtain representation in the diet. 
Germany already has sufficient trouble with the foreign element now 
present in the diet. Consequently there can be no question of any 
considerable acquisition of territory from France, but the demands 
of Germany simply extend to the iron-ore fields of Lorraine, which 
are certainly of considerable value. For France these mining fields 
are of far less consideration than for Germany, whose immense iron 
trade is far more in need of the iron mines. 

The second factor is that the Germans, owing to the strong public 
opinion, will never consent to Belgium regaining her liberty. The 
chancellor of the Empire has, as long as it was possible, been opposed 
to the annexation of Belgium, having preferred, even during hostili- 
ties, to have reestablished the Belgian Kingdom. It is significant 
that the military authorities have prohibited the German press from 
discussing the question of the future of Belgium. It is evident that 
there has prevailed a wish to leave the question open in order to 
insure a solution offering various possibilities. But subsequent to 
the discovery of the Anglo-Belgian plot, as previously stated, all idea 
of reinstating Belgium has been discarded. 



TEADE AGKEEMEXTS ABROAD. 13 

The annexation of Belgium, however, makes it possible to grant 
France less stringent conditions. So long as Belgium — under some 
form of self-government — is under German sway there is no hope of 
revenge of France, and the conviction prevails here that after this 
war France will abstain from her dreams of aggrandizement and 
become pacific. Germany can then make reductions in the burdens 
laid on her people for military service by land. 

To arrange the position of Belgium in relation to Germany will 
be a very interesting problem for German policy. 

It is obvious that the annexation of Belgium can not be defended 
from the point of view of the principle of nationality. The Bel- 
gians — half of them French, half of them Flemish — undoubtedly 
deem themselves but one nation. As a mitigating circumstance in 
favor of the annexation it is urged — above and beyond the intrigues 
carried on by Belgium w^ith the English — that Belgium, in days of 
yore, for a long time formed a portion of the German Empire, and 
that the inhabitants of the little country, to a considerable degree, 
gain their livelihood by its being a land of transit for German pro- 
ducts. Nationally, the annexation is not to be defended, but geog- 
raphically, economically, and from a military point of view it is 
comprehensible. 

At the east front of the central powers very different conditions 
prevail. Austria has no desire to make the conquest of any territory ; 
indeed, just the contrary, would probably be willing to cede a por- 
tion of Galicia in favor of new States. Germany has not the slightest 
inclination to incorporate portions of Slav or Lettish regions. Both 
Germany and Austria wish to establish free buffer States between 
themselves and the great Russian Empire. 

Not even the Baltic Provinces, where Germans hold almost the 
same position as the Swedes in Finland, form an object for the Ger- 
man desire of conquest, but her wish is to make them, as also Finland, 
an independent State. Furthermore, the Kingdom of Poland and a 
Kingdom of Ukraine would be the outcome of decisive victories for 
the central powers. 

What Germany would demand of these new States, whose very 
existence was the outcome of her success at arms, would simply be 
an economical organization in common with the German Empire, 
an enormous central European Zollverein (customs union) with Ger- 
many at its heart. It is only such a union, in the opinion of leading 
German statesmen, which could hold the United States of North 
America at bay, and after this present war, moreover, the world 
would only have to take into account two first-class powers, viz, 
Germany and the United States of America. 

A commencement of this new economical connection is being made 
by the negotiations entered on by representatives of Austria- 
Hungary and Germany concerning the proposed formation of a 
customs union. Since this union would include 120,000,000 indi- 
viduals, it must be evident what an immense attraction it must 
exert on the surrounding smaller nations. Switzerland and Hol- 
land can scarcely escape this attraction, and the Scandinavian 
countries, it is said, would probably find it to their advantage, to- 
gether with a liberated Finland, to form a northern customs union, 
which later, on an independent basis, could enter in close union with 
the vast Zollverein of central Europe. 



14 TRADE AGREEMENTS ABROAD. 

This ZoUverein would then include about 175,000,000 individuals. 
The adhesion of Italy to the vast union would not be inconceivable, 
and then the combination of the United States of Europe, founded 
on a voluntary commercial union, would be approaching its reali- 
zation. 

Such a commercial union, embracing various peoples, could only 
lead to moderation in foreign politics, and would be the best guar- 
anty for the peace of the universe. A brisk interchange of com- 
modities, a fruitful interchange of cultural ideas would result from 
such a union, connecting the polar seas with the Mediterranean, 
and the Netherlands with the Steppes of southern Russia. 

All States participating in this union would gain thereby. But 
one European country would be the loser — Great Britain, the land 
of promise for the middle man ; that, according to German compre- 
hension, at present gains a living by skimming the cream from the 
trade industry of other nations by facilitating the exchange of 
goods, and making profits by being the banking center of the world. 

The Germans declare that there is no reason for such a middle 
man's existence in our day. The banking system is now so devel- 
oped in all civilized lands that, for example, Sweden can remit direct 
to Australia or the Argentine for goods obtained, hence, instead of 
making payment via London and there rate, by raising the exchange 
for sovereigns to an unnatural height, so that, as a matter of fact, 
England levies a tax on all international interchange of com- 
modities. 

In opposition to this glorious vision of the days to come, which 
the Germans wish to realize by their victories in war, there is the 
alluring prospect of the allies that by their victory they will deal 
a death blow to German militarism. While the English, with their 
200,000 troops, are good enough to promise no conquest of German 
territory — what says Russia to this ? — at the close of the war, in the 
opinion of the Britons, there would still remain 65,000,000 Germans 
right in the center of Europe, organized as a kingdom burdened with 
a war indemnity to a couple of tens of milliards in marks. 

This nation, however, strengthened by 15,000,000 Germans in 
Austria, would be the greatest bearers of culture in the wide world — 
the nation with the best technical equipment of all others, glowing 
with ambition, with military training second to none, and gifted with 
an immense rate of increase as regards population. This Nation 
would be forced to lay down her arms, lying as it does between the 
overbearing gigantic realm in the east and the warlike French to 
the west. The idea is incomprehensible. The universe would behold 
a competition in armaments such as it had never seen. 

A victorious Germany, on the other hand, would become less and 
less military, since she would not need to arm herself to such an 
extent as now. She is already chiefly an industrial country. Her 
desire to be wealthy, and wealth invariably smothers military in- 
stincts. Germany has set up far greater ideals as regards social de- 
velopments than other countries, and all she asks is to be left in 
peace calmly to carry out these plans in the future. German mili- 
tarism can only be conquered by the victory being on her side, since 
she has no thought of military supremacy, but simply of founding 
a new economical organization in Europe. 

GuSTAF SlOESTEEN. 



TEADE AGREEMENTS ABROAD. - 15 

[Jahrbucher fur National-Okonomie und Statistics, Jena, 1916, pp. 831 and 832.] 

ECONOMIC UNION OF GERMANY AND AUSTRIA-HUNGARY. 

CONFERENCE. 

In regard to an economic-political union between Germany and 
Austria-Hungary, the Frankfurter Zeitung, of December 10, 1915, 
in brief, makes the following statement: 

Not long ago a conference of the representatives of the economic 
associations of Germany and Austria-Hungary took placfe in Vienna. 
Under the leadership of the three presidents of three associations, 
namely, Herzog Ernst Giinther zu Schleswig-Holstein, Finanz- 
minister a. D. Baron Plener, and Ministerpresident a. D. Wekerle, 
the conference, composed of the representatives of agriculture, in- 
dustry, and commerce of both countries, adopted the following reso- 
lutions : 

1. Both countries must enter a close economic relationship before 
peace is declared. 

2. Such relationship has to be a reciprocal one — based upon mutual 
interests and advantages — covering the entire economic life of both 
countries, tariff policy, ways of communication, etc. 

3. The tariff policy between both countries must be based upon 
the principle of a gradual enlargement of the free list and of a 
periodical revision of tariff and communication policy. Tariff plans, 
trade-marks, and tariff legislation must be uniform and centralized. 

4. This proposition is not applicable to the most-favored-nation 
clause in treaties with other States, especially in peace treaties. 

5. The making of commercial treaties with other countries must 
be based upon common and equal interests of both States. 

6. All measures of legislative and administrative character for 
development of production, commerce, communication, and finance 
must be introduced by united efforts and in the sense of close rap- 
IDrochement between both countries. 

7. Such agreement must be of a continuous character. 

8. The negotiations of commercial agreements and treaties with 
other States must be based upon mutual understanding and economic 
interests of both united countries. 

(See also "Proposed Austro-German customs union," Commerce 
Reports, Feb. 11, 1916, pp. 582 and 583.) 

GERMANY'. 

[Public Ledger (Philadelpbia), Mar. 22, 1916, p. 17.] 

The presidents of German commercial bodies, like the Hamburg 
Chamber of Commerce, in addressing their members, emphasize the 
great importance of foreign trade of the country and at the same 
time request that they be asked publicly for no information regard- 
ing the plans which are being made. 

[The New York Times, June 21, 1916.] 

A resolution advocating the establishment of an independent 
imperial ministry of commerce, trade, and industry was introduced 
in the Reichstag on May 10. 1916, by the leader of the Saxon Manu- 
facturers' Association. 



16 TEADE AGEEEMENTS ABEOAD. 

Vast and important new combinations have either been effected 
or are in process of establishment in the German chemical, shipping, 
electrical, steel and iron, textile, and various minor trades for the 
purpose to centralize German strength for " the war after the war." 

[The Economist, Mar. 18, 1916, p. 543.] 

It is reported that the German Government has prepared for the 
resumption of industry after the war by forming a Rohstoffszentrale, 
or central organization for raw material, with the exclusive right of 
purchasing such material in foreign countries, and that the cotton 
trade is to be compelled to form a syndicate' to receive the niaterial 
and distribute it among the manufacturers, according to their needs. 
Otherwise the price would be unduly forced up by their internecive 
competition and the loss on exchange. Other trades are expected to 
be similarly syndicated, and the whole business of importers will 
be destroyed or suspended. 

[The New York Times, June 21, 1916.] 

A bill was introduced into the Prussian House of Lords, providing 
for compulsory learning of modern commercial languages in all the 
higher schools of the state. The bill requires special arrangements 
for promoting knowledge of oriental languages and affairs. 



[Washington Post, Saturday, July 1, 1916.] 

Germany Building Biggest or Liners. 

" BISMARCK," 56,000 TONS, ON STOCKS, WHILE SMALLER SHIP, " TIRPITZ," 

IS BEGUN. 

Copenhagen, June SO. 

Herr Ballin, general manager of the Hamburg-American Line, 
says his company is building a turbine ship, the Bismarck., of 56,000 
tons, which will be the w^orld's greatest steamer. It also is building 
a steamer, to be called the Tirpitz., of 30,000 tons, and three other 
vessels of 32,000 tons each. 

At Bremen there are building nine vessels, four of them having a 
carrying capacity of 18,000 tons, being the world's greatest freight 
steamers ; at Flensburg, two steamers of 13,000 tons and three larger 
passenger and freight steamers, and at Geeste Munde two freight 
steamers of 17,000 tons each for traffic through the Panama Canal. 

The Hamburger-South America Line is building a vessel, to be 
known as the Gapt. Polonio^ a sister ship to the auxiliary cruiser 
Gapt. Trafalgar., while the North German Lloyd is building two fast 
steamers, the Golurribus and Hindenburg ., of 30,000 tons each; the 
Muchen and Zeppelin, of 15,000 tons each, and 12 vessels of 12,000 
tons each. 

Twenty-four ships of from 9,000 to 13,000 tons are being built for 
other lines. 



[Commerce Reports, Feb. 11, 1916, pp. 582, 583.] 
AUSTRIA-HUNGARY. 

The Vienna Chamber of Commerce on the 21st of October, 1915, 
unanimously adopted a declaration of policy in regard to the future 



TRADE AGEEEMEXTS ABROAD. 17 

economic relations with the German Empire. The most important 
points in the declaration are as follows : 

Alliance with the German Empire by an economic union for the 
purpose of defending with greater energy their commercial interest 
in the world market. 

The treaty for such union has to be of the longest possible term 
of duration. 

Both contracting parties have to act as a unit in the negotiation of 
commercial treaties with other countries. 

A common tariff system has to be established. 

The treaty of the union has to be concluded before the beginning 
of the peace negotiations. 

This commercial union has to be recognized in the peace treaties. 

A new compromise agreement (ausgleichsvertrag) with Hungary 
has to be made for the purpose of meeting the new economic relations 
with the German Empire. 

[Speek. July 7, 1916.] 



[Parliamentary Debates, House of Lords, April, 1916. Vol. 21, No. 19.] 

Indicatioxs of Entente Allies' Post-bellu3i Policy. 

THE allies' economic CONFERENCE. 

Lord Courtney, of Penwith, rose to call attention to the forthcom- 
ing conference of the allies on proposed trade regulations between 
them after the war, and to move for copies of — 

1. Invitations addressed to His Majesty's Government to join in 
such a conference. 

2. Replies to such invitations. 

3. Instructions given to the representatives cf the Government 
appointed to attend the conference. 

The noble lord said : My lords, on September 29, 1914, the prime 
minister, in addressing a recruiting meeting at the Mansion House 
in Dublin, used words of a very remarkable character, of which note 
was taken at the time and to which I will venture to recall the atten- 
tion of your lordships. After relating the immediate objects of the 
meeting — the procuring of recruits for the struggle which we were 
then just beginning— he ventured to look forAvard to what would 
be the problem after the war, and spoke of post-bellum cares and 
considerations. He said, with reference to what Mr. Gladstone's 
language had been in 1871 on "the enthronement of the idea of pub- 
lic right in European politics." that this was a great and magnificent 
thing, not yet wholly realized, but after the war was over it would 
have an opportunity of being reasserted. Explaining what the 
recognition of that right meant, he said : 

It means finally, or it ought to mean, perhaps by a slow and gradual process, 
the substitution for force, for the clash of competing ambitions, for groupings 
and alliances and a precarious equipoise, of a real European partnership, based 
on the recognition of equal rights, and established and enforced by a common 
will. 

I repeat that these were remarkable words. 
S. Doc. 491, 64-1 2 



18 TRADE AGEEEMENTS ABEOAD. 

It was a A'eiy fine utterance to make on that occasion, and this 
should be kept before us throughout the war as a living principle 
which should govern our thoughts and direct our conduct. 

In the actual struggle the passion of fight swallows almost every 
other feeling. The blind wild beast of force, whose home is in the 
sinews of a man, absorbs almost every consideration of what is due 
even to an adversary, and there is nothing left in the combatant 
but the desire to overcome the enemy with whom he is fighting. But 
let the fight be over, and those who have the power should bring 
back saner counsels. It is surely the dutj^, my lords, of a governing 
person, of a real ruler of men, of a shepherd of the people, always 
to keep before the nation the highest counsels, which are so much 
in danger of being lost sight of in the struggle of war. Many of 
us welcomed the prime minister's language at Dublin, and often 
recurred to it. He himself did not for a long time repeat it, and 
we began to be afraid that these counsels of perfection might be 
lost sight of. But when challenged so lately as February 23 the 
prime minister declared that he was of precisely the same mind then 
as he was in the autumn of 1914: and so latelj^ as last night, in the 
remarkable speech which he addressed to the French senators and 
deputies, he interwove the sentiments to which I have called atten- 
tion with the prime necessity of carrying on the war with energy 
and resolution. So that I am entitled to rejoice that the prime 
minister, although we were anxious about it, has not forgotten 
his counsels of 1914 and will remember them in due time. In his 
Dublin speech of September, 1911, immediately following the 
passage which I have already quoted. Mr. Asquith said : 

A year ago that would have sounded like a Utopian idea. It is probably one 
that may not or will not be realized, either to-day or to-morrow, but if and 
Avhen this war is decided in favor of the allies it will at once come within the 
range and before long within the grasp of European statesmanship. 

By slow degrees, he said, the long patience, this was what he would 
desire should follow. And I venture to say' that the policy thus 
suggested is as wise as it is far-seeing : it is a policy of prudence as 
well as large-mindedness. 

If I might venture to quote the action of a man to whom I do not 
often refer, as I am not one of those who privately or publicly am 
prone to pay him much worship — I mean Bismarck — I should like to 
recall to your lordships his action at the close of the Seven Weeks' 
War in 1866. At Sadowa the Prussian Army had inflicted a stag- 
gering blow on the Austrian Throne. The Emperor of Austria- 
Hungary had not yet settled — it was in the year after, under the 
influence of this, that he did settle — his standing quarrel with 
Hungary. He lay almost at the mercy of the victor ; and there was 
great pressure, it was understood, put upon Count Bismarck — as he 
then was — to extort great concessions and large indemnities from 
Austria-Hungary. But he refused. He was content to remove the 
Emperor of Austria from his position as aspiring to the hegemony 
of the whole Prussian people, to let the North German Confederation 
be reestablished without the intervention of Austria in anywaj'^ in it, 
and to leave Austria-Hungary practically unchanged. It is true 
that there was associated with the treaty, or part of it, the cession 
of Venetia to Italy, but that was due to the intervention of France, 
and was no part of the penalty inflicted upon Austria by the Prussian 



TEADE AGREEMENTS ABEOAD. 19 

victor. This was Count Bismarck's policy ; and those who look back 
upon it must surely see that he was plenteously rewarded for the 
wisdom which he showed on that occasion. In the years that fol- 
lowed, the greatest temptations were addressed over and over again 
to the Emperor Francis Joseph to try and undo what had been done 
in 1866. Offers and bribes came from Paris, grand dukes and min- 
isters of state went to and fro, the Emperor Napoleon was active 
then and subsequently. But, as your lordships know, down to this 
day the aged Austrian Emperor has been faithful to his alliance with 
Prussian and has never allowed himself in any degree to swerve from 
fidelity to the friendshijD so established — a great reward for a great 
exercise of political wisdom. 

Why do I recall to your lordships the language of Mr. Asquith, 
in Dublin, and the action of Count Bismarck after the battle of 
Sadowa? I recall them in connection with the subject to which I 
wish to ask your attention especially this evening — the approaching 
conference between the allies on post-bellum trade relations ; because 
it seems to me that this conference is full of peril to the realization 
of the principle to which I have called attention, and that, instead 
of helping to the reestablishment of European peace and a partner- 
ship based on the recognition of equal rights, it is, as far as I 
understand it, an attempt to pursue after the war, in a sphere other 
than that of the battlefield, a similar enmity and antagonism to the 
German people, German trade, and German prosperity. I am en- 
titled, I think, to ask for an explanation of this apparent discrepancy 
between the policy of the conference to which His Majesty's Gov- 
ernment is in some measure pledged and the policy which the prime 
minister enunciated at Dublin. The conference itself one, perhaps, 
might be disposed to treat someAvhat lightly. One can understand 
that it might have been agreed upon on an invitation addressed to 
His Majesty's ministers, who did not see their way to reject it. 

But, unfortunately, my lords, this conference does not stand alone. 
It must be associated with language used, not merely by irresponsible 
writers, but by some of the highest and most trusted members of His 
Majesty's Government. I can not separate the conference from the 
declaration made by Mr. Eunciman in the House of Commons when 
he spoke of bringing down the power of German commerce- and never 
allowing it to rear its head again as it had done before. I am aware 
that Mr. Runciman has since in some measure, by one of those strange 
processes resorted to by ministers of an interview with a newspaper 
reporter— an American journalist — endeavored to explain away the 
apparent force of what he said. He does not question the accuracy 
of the report. He admits it. It is found too permanently embedded 
in the unalterable pages of Hansard. But he should like to have said, 
not that the " head," but that the " helmet " should never be raised 
again. That is the correction. But I venture to say that if the word 
"helmet" had occurred in the original speech, it w^ould have been 
entirely irrelevant. The speech had no reference to military action, 
to the struggle for military supremacy; it was a speech following 
upon a discussion initiated in the House of Commons by Mr. Hew- 
ins — that consistent, single-minded supporter of trade agreements be- 
tween the dominions of the Empire— and the debate following his 
speech wa's entirely confined to the post bellum trade relations of the 
Empire and the allies. In such a concatenation it is absurd to talk 



20 TEADE AGEEEMENTS ABEOAD. 

about the helmet not being raised again. The helmet of commerce 
has no meaning, whereas the head of commerce is a metaphor we all 
understand. 

This declaration by Mr. Runciman, though qualified as it has been, 
coupled with the conference which is about to assemble, must not only 
raise anxieties here but provoke unfortunate consequences in Ger- 
many itself. What more stimulating address could be delivered to 
any who in Germany were wavering in their zeal in support of the 
war than one suggesting that the war in the field would be followed 
by a war in the market, and that the power of recovery of German 
industry and German commerce was to be undermined and made per- 
petually incapable of realization? There are many in Germam^ who 
are more or less weary of the trials and losses of the war and would 
fain see some possibility of coming to the end of it. -They are dis- 
couraged by this conference and this language. On the other hand, 
those in Germany who are most eager for the continuance of the war 
rejoice in the declaration and in the fact of the conference as justify- 
ing themselves and as furnishing new causes for continuing the war 
with more vigor and more energy than ever. Count Reventlow. for 
example, has addressed language to his countrymen pointing out how 
absurd it is for them to think that there could be Sinj peace between 
Germany and England until England was reduced to the dust, on the 
ground that it had been declared that the policy of England was not 
a policy of self-defense, not a desire to curb and reduce the overbear- 
ing military authority of Prussia, and of Germany through Prussia, 
but a desire to crush the growth of Germany, to nullify its progress, 
to destroy its commerce, to reduce its manufactures. They point to 
your conference and to Mr. Runciman's language and say " The truth 
is revealed. This is the language, the somewhat extraordinary but 
the candid language, of a British minister who declares what is the 
policy of his colleagues." I hope to obtain from His Majesty's Gov- 
ernment some explanation which shall help to clear away this unfor- 
tunate situation. 

We know very little of the proposed conference, but we have picked 
up hints about it here and there of a strange and uncertain character. 
We have seen communications from Paris, communications appar- 
ently inspired in the press; the question has been raised in another 
place, and the prime minister himself has spoken upon it ; but all he 
could say, which was not very encouraging, especially when we re- 
member similar language applied to another sphere of political 
action, was that our representatives at the conference would go to 
take part in it doubtless, but to commit themselves and their Gov- 
ernment in no way whatever; that they Avould come back absolutely 
unfettered; that the Government would be unfettered; that Parlia- 
ment would be unfettered; that the nation would be unfettered: and 
that the action to be taken consequent upon the conference would in 
no way depend on what happened at the conference. That is good 
as far as it goes. But we all know when responsible delegates so 
from a ministry to take part in a conference on an international situa- 
tion and assent to or favor a policy at that particular conference and 
bring home favorable reports upon it, that their colleagues are 
scarcely, if ever, in a position to set aside their counsels and their 
recommendations. One example occurs to me — an example, I am 
afraid, which would not be followed even if the circumstances could 



TEADE AGEEEMEXTS ABEOAD. 21 

be reproduced to-day. I remember Lord John Russell, returning 
from Vienna in the early part of the Crimean War, having favored 
a certain line of policy at the Austrian capital, being repudiated 
when he got home. It seems to me, looking back upon that incident, 
that we lived in more stalwart times then than now, and ministers 
were often able to repudiate colleagues wdiere now they would con- 
done or even accept the conclusions arrived at, although they might 
regard them as unfortunate. I have said that we know very little of 
this conference. This much, however, I think we do know. The one 
thing which is put forward as the end of it — different schemes of 
macliinerj^ will be suggested for arriving at that end — is the keeping 
down of German commerce and German progress and the peaceful de- 
velopment of her manufacturing and industrial resources. If that 
is true, the situation is infinitely to be regretted. 

I have assumed in the question which I have put upon the paper 
what I think is conceded as a fact — namely, that the invitation to 
this conference did not originate with His Majesty's Government, but 
was addressed to them. I think that must be so, because before we 
could have invited the allies to a conference on the post bellum trade 
relations between them we would have had to arrive at some clear 
conception between ourselves as to what was our own policy. We 
could not ask others to come in and consider a policy when we had 
no unified policy of our own. And it is surely plain — I hope it is still 
plain — that in the matter of reciprocal trade relations, in the matter 
and the policy of tariffs, there exists a difference between the policy 
of the I'nited Kingdom and the policy of the dominions which is 
practically unalterable. Many changes may be brought about by the 
course of this war. I do not wish at all to limit the conception which 
may be formed of the alterations which are possible. But this much 
I venture to say: That even if the war were to last 2 j^ears more, or 
even 10 years more, at the end of that time our dominions would 
still be found imposing duties on the imports of British manufac- 
tures, and I hope w^e should still be found not consenting to a re- 
versal of the doctrines of free trade. 

When Lord Salisbury talked of imperial federation sorne years 
ago and discussed its difficuties, I remember he said that in order 
to carry through the unity which was then being advocated you 
must set up a Kriegsverein and a ZoUverein. I would not have used 
those phases, convenient as they are, had I not his authority, and 1 
apologize for reproducino- them now. You may in the course of this 
w^ar set up a Kriegsverein that is, you may before it concludes be 
able to establish some organization of the military forces of the 
United Kingdom and of the dominions so as to make one organi- 
zation of the whole. I conceive that to be possible. And it might 
follow that in order to have that which means, of course, the reduc- 
tion of the Government and the Parliament of this country t^o the 
occupation of a second place — it will be necessary to have a Kriegs 
council Avorking for the dominions and the home Government, and 
it might be possible to have a special revenue for the working action 
of that council and the Kriegsverein. But even then you would 
still have subsisting the difference between the tariff' policies of the 
dominions and the tariff policy of the home country, and you would 
not have anything approaching to a real Zollverein. You might 
have something like the combination of Austria and Hungary, each 



22 TRADE AGREEMENTS ABROAD. 

with its own organization, contributing certain quotas to the cause 
of the united action. 

This being so, it would be impossible for us to have convened 
the conference. We could not have put before them one policj^, and 
if our representatives go to the conference they will have to represent 
to those with whom they are conferring the unchanging conclitions 
and the diversity of policy in regard to trade regulations in the 
different parts of the Empire. Although I am prehaps dwelling 
upon a topic which might be dropped, I would add this more. Be- 
fore we could go into a conference, before we could sustain any 
intelligent share in the proceedings of a conference, we must not 
only come to some agreement Avith our dominions, which has not 
been reached, but, we should have to reconsider the very perplexing 
but very grave problem of the position of India in respect to such 
changes. When the minor question of diminutions of tariffs, of 
allowances for the reduction of tariffs in favor of different parts 
of the Empire was under consideration, the question was referred 
to India, and you received an answer from India unfavorable to 
the entertainment of any such proposition. If you are to go into any 
new departure from the principles then avowed, you would have to 
consult India. The position is this, that as at present advised we 
are not in a position to take any intelligent share in any practical 
deliberations leading to practical results on the part of any such 
conference as it suggested. 

We were told yesterday that a new representative is to be added 
to the two already named who are to attend this conference. Mr. 
Hughes (prime minister of the Commonwealth of Australia) has 
consented to go, in addition, as I understand, to Mr. Runciman and 
Mr. Bonar Law. Mr. Hughes will be able to state his views of the 
policy of the Empire at such a conference. Mr. Bonar Law may 
more or less agree with him. Mr. Runciman will have to say his 
say. But thej^ can scarcely commit the Government at home, they 
can scarcely represent the Government at home, in any such con- 
ference ; and except by supposing that changes much more vast than 
any of which we have had an inkling have occurred, I am at a loss 
to understand in what sense Mr. Hughes could be properly said to 
be a representative of His Majesty's Government at such a con- 
ference. To represent the opinion of the Commonwealth of Aus- 
tralia he may well be able, and he would do so with great power and 
great energy; but to represent His Majesty's Government is, I should 
think, a thing which would tax his ingenuity, and, in fact, be foreign 
to his desire. For he has independent aims ; he has proposals Avhich 
have not yet been adopted, and, as far as I can see, are not in the 
way of being adoptecl. The conclusion to which I have arrived 
is that this conference is due to the invitation of some other power. 
"Wliether of one power or more than one power, or of some per- 
sonages not even in the Government of one of our allies Avho have 
moved their Government to bring about the conference, we know not. 
But allowing the utmost possible scope to its action, it appears to me 
that so far as we are concerned the negotiations can only result in a 
limited tariff, involving great trouble in the working and much loss 
to ourselves, and threatening finally — indeed, certain in the end — to 
break down through the impossibility of carrying it through. 



TEADE AGEEEMENTS ABEOAD. 23 

Though I do not think it likely, I can conceive of the conference 
arriving at a conclusion which, as far as regarded ourselves, would 
involve the establishment of tariff duties to which Ave have never con- 
sented ; Avith a reduction in favor of our dominions, possibly absolute 
freedom from duties on some commodities in. respect to the domin- 
ions; Avith a smaller reduction in the case of our allies; with a still 
smaller reduction in the case of neutrals; and, finally, Avith some- 
thing like prohibitive duties in the case of the enemy against whom 
this conference is directed. But what would be the chance of work- 
ing out such an agreement as I have sketched, even if it were 
adopted? How avouIcI it commend itself to the conference, in the 
first place? You propose a tariff Avith a reduction of, or absolute 
freedom from, its duties in the case of our colonies. What would 
Russia, for example, say to that? Russia is a member of the con- 
ference — perhaps the leading member, I do not know. Russia is a 
competitor Avith our leading dominions in the matter of raw prod- 
ucts. What Avould Russia say ? - She Avould say, " The whole result 
of this conference is that, instead of being admitted on equal terms 
Avith the United Kingdom, Ave are to be put behind the colonies. 
We have been admitted free from duties hitherto; noAv we are to 
have duties imposed upon us." The thing would obviously be repug- 
nant to, if not absolutely impossible of adoption on the part of, 
Russia. 

Take another, perhaps a clearer illustration, of the difficulties in- 
volved. What Avould result from a change in the duties on an article 
which is already in our tariff — Avine? Neither chancellor of the 
exchequer in the course of his Avar budgets has touched wine, and I 
think wisely. A screw of the income tax get much more out of the 
same people than could be ever got by any chance in the Avine duties. 
It is a cheaper, more expeditious, readier way of getting the money 
you want, and practically affects the same class of citizens. But it is 
possible that the chancellor of the exchequer has refrained from 
touching this article because of the great interests which our allies 
have in wine. What would France say if Ave placed an extra duty 
on wine ? France would say that it Avas very unfriendly. But that 
is not the worst. If you are going on with taxes as suggested, you 
would admit wine from Australia, and possibly wine from the cape, 
at a lower rate of duties than joi\ would admit from France. So that 
you would have France again exposed to complaint. She Avould 
say, " We are not even as Avell off as Ave were before. The duties 
themseh^es being unchanged, we are exposed to competition through 
the wines that comes in from the colonies, Avhich before Avere taxed 
in the same Avay as ours." I need not refer to the feelings of allies 
on the point. If you are going on with the graduation of Avhich I 
have spoken, you Avould expect the United States, possibl}^, to com- 
plain. The wine industry of the United States is growing, and in 
the course of a generation or two Avill be considerable. If you 
adopted a wine tariff which imposed a Ioav duty on Dominion Avines, 
a higher duty on the wines of our allies, a third higher duty on 
neutral wines, and a prohibitiA^e duty on German Avines, you can 
see the confusion that would be caused, the remonstrances that Avould 
be excited, and the discontent that Avould be provoked among our 
allies themselves. In addition to the complexity of the machinery 



24 TRADE AGREEMENTS ABROAD. 

for carrying out these changes, the changes Avould result in a loss to 
ourselves and in irritation to our allies. 

I venture to go further and to say that even the final stroke of 
policy on which all these proceedings are based — that of keeping 
under and crushing the power of reinvigoration of German in- 
dustry — must fail from the nature of things, because even amongst 
our allies and the neutrals friendly to us you would find people to 
whom this as a standard policy would be insupportable. The prime 
minister has dwelt more than once, and rightly, on the necessity of 
putting back Belgium in its old independent and vigorous condition. 
As he said last night, he wants the " old Belgium " back, not a new 
and changed Belgium. That is what we must all desire. But jt'ou 
can not have an old Belgium unless you have also an old Germany 
possible of revival. I desire special attention to this, because I think 
upon this point you would find that the whole scheme would break 
down. Speaking physically, as a matter of physical geography — not 
political — what are Rotterdam and Antwerp but out ports of 
Germany? Some people will at once say that I am calling them 
German. I am doing nothing of the kind. But Rotterdam and 
Antwerp, like Bremen and Hamburg, have developed, have flour- 
ished, have grown populous and wealthy because there was this 
hinterland behind them with thriving and active industries — the 
hinterland of the Westphalian coal mines, of iron works, of the rich 
cultivated plains of North Germany, of the Rhine, and other val- 
leys — this hinterland to which, as I say, Rotterdam and Antwerp 
are as much outports as are Hamburg and Bremen. The treaty of 
Westphalia did, indeed, as we know, destroy Antwerp as an outport : 
it forbade the access of Antwerp to the sea; it closed the Scheldt. 
In their unenlightened selfishness the Hollanders did their best to 
destroy the river, and Antwerp was practically destroyed, with 
this curious result, that the great Napoleonic War ended with the 
establishment of the free access of Antwerp to the sea. That is an 
illustration of the truth which I wish to impress upon j^ou. What- 
ever might have been possible in 1643, it would be impossible now to 
destroy Antwerp or to prevent Antwerp and Rotterdam coming again 
into their position of energy and growth dependent upon the revival 
of Germany behind them; and the feeling in Belgium itself would 
soon become manifest as to the impossibility of maintaining a true 
line of demarcation between the hinterland and Belgium. 

It may, perhaps, help if I give an illustration free from the em- 
barrassment attached to the mentioning of Belgium. I will speak 
of Liverpool and Glasgow. Liverpool and Glasgow might be fairly 
described, figuratively, as the receiving houses of America — Liver- 
pool with Lancashire behind it. Glasgow- with Lanarkshire behind it. 
Both have thriven because there was a great country at the other 
side of the Atlantic flourishing and growing, and because there was 
free intercourse between those ports and that country which poured 
its supplies into the United Kingdom. As Liverpool and Glasgow 
have depended upon America, so do Rotterdam and Antwerp de- 
pend upon Germany, and the attempt to keep Germany down, and 
thereby to keep Rotterdam and Antwerp down, would be defeated 
by the repudiation of your friends, the Dutch, and your allies, the 
Belgians. I believe it would be absolutely impossible in the same 
way to maintain anything like a prohibition of intercourse between 



TRADE AGREEMENTS ABROAD, 25 

Eiissia and Germany; although I admit that in approaching the 
question of the Russian frontier of Germany and the views that 
liave been set out, by the German chancellor on the one side and 
by the Czar m his opening proclamation at the beginning of the war 
on the other, I feel that in respect of Poland one is rather in the 
realm of phantasy when trying to think about it. 

But the chief and clear result is that if you adopted a scheme such 
as I have described you would have great confusion, a machinery 
liable to the greatest abuse, and a multiplication of certificates of 
origin, which would defeat the very scheme vou had set on foot as 
well as cause constant irritation to your allies and friends. And all 
for the purpose of impoverishing ourselves! Because it is true- 
surely this war has proved it— that free trade in the past has given 
us the wealth, the resources, the credit without which the carrying 
on of the war would have been impossible. It is free trade which 
distinguishes us from our allies; it is free trade which has enabled 
us to support them and their burdens, and has made possible that 
which would have been difficult, if not impossible, but for that assist- 
ance; and it is to free trade that we must look for the power of 
restoration in the future. Though I am as sure of this as I am of 
any proposition which I could make to your lordships, I do not dwell 
upon it in reference to this conference as much as upon the fatal 
objection to which I referred at the first — that the mere institution 
of such a conference is a revival of anger, resentment, heat, and de- 
termination to carry on the war in Germany itself, and is alienating 
from us those forces in Germany which are visibly tending toward 
some possible settlement of the catastrophe which is devastating 
Europe. 

Some of your lordships may have read an article by Prof. Delbriick 
which appeared in the Contemporary Review in 1913. It dwelt upon 
the obstacles which the United Kingdom had thrown in the way of 
the expansion of Germany on all hands. It was a painful article to 
read, an article which appeared to me to be full of misconceptions 
and of erroneous valuations of the facts mentioned. Too much stress 
was laid upon some, and too little attention paid elsewhere. It was 
an article which, with all respect to the professor Avho wrote it. one 
would call " wrong-headed." Still it was impossible to dispute that 
there was some appearance of justification for it. The writer stated 
that in Africa, in Asia, in Baghdad, in Asia Minor, in southeast 
Europe, indeed ever^^where we were doing our best to swamp the 
l^eaceful development of Germany. Prof. Delbriick still justifies the 
war on the German side, but he has also been one of the most ener- 
getic and forcible opponents of those who have of late headed a move- 
ment for annexation on the part of Germany. I ask you to realize 
wdiat must be the effect on such a man of the adoption of this policy, 
which goes to support all the views which he held before the war. 
Think of Dr. Liebknecht. Many of you must have admired his 
courage in speakhig alone in the German Reichstag, and in having 
the courage to tell the Kaiser what his vieAvs were. His power of 
argument will be affected by the situation created in the calling of 
this conference together. 

There is one thouglit which I desire still to press upon your lord- 
ships. Can we turn this conference to any useful purpose? Is there 
any flower of safety Avhich we might pluck out of the nettles which 



26 TEADE AGEEEMENTS ABEOAD. 

seem to be its embodiment? It has been said with a good deal of 
truth that recent wars have been all trade wars, wars to enable trades 
to be maintained and commercial enterprises to be carried through; 
and financiers and concessionnaires have been denounced as the mis- 
chievous, secret, unprincipled creatures who move behind statesmen 
and governments and bring about wars and complications in every 
land, and have even brought about the present war. Some of my 
friends, I think, have financiers and concessionnaires on the brain. I 
am sure that the majority of financiers, to use the phrase of the late 
Lord Derby, know that " peace is their highest influence." Still it is 
true that some financiers and concessionaires have threatened and are 
threatening clanger and will continue to threaten danger so long as 
the policy for Avhich the.y plaj^ is allowed to remain in existence — 
that is to say, the policy of exclusion from a dominion or a possession 
over which they get an authority of any trader but themselves. I do 
not think much can be got out of this conference, but I think that in 
the course of its meetings somebody might be well advised to drop a 
hint, to utter a word, to make a suggestion in passing, which might 
be thought over and might be used at a later conference to produce 
some real results, because this conference in itself is only a prelimi- 
na.rj. When peace is established there will be a conference indeed, a 
conference to which you may expect neutrals as well as belligerents to 
be parties. The subject on which I think a hint might be dropped in 
respect of such a conference is this: Might not we come to some 
agreement about the open door ? Might not we see some possibility of 
preventing dangers in Africa, of preventing dangers — very imminent 
dangers — in Asia, hj the agreement to adopt, as a common policy for 
all the powers met together for a regenerated Europe — or I would 
say, for a regenerated civilized humanity — the policy of the open 
door, and bind ourselves that under all circumstances we will grant 
and do our best to secure equal treatment to all within these domains 
which belong to none of us and into which we may seek an entrance 
for trade and commerce? 

Here surely is something very pertinent to lay before our allies. 
France, for example, has not observed — very much to the contrary — 
the principle of the open door. When France took over the pos- 
session of Madagascar the very flourishing British trade that ex- 
isted there, important British connections, entirely disappeared. The 
French commercial regime, the French trade regulations, were so 
adverse to rivals that the British merchants and the British ships 
had to disappear. So also when Tunis was taken over, and so it 
appeared to be possible in the action which was being taken to 
permeate Morocco. Now, if France would only be lecl to think 
a little about the adoption of the open door, I Avill not say in these 
countries where it has been already closed but in respect of other 
countries, something might be done. Then there is the question of 
China ; that is one of the great difficulties of the future. And will 
Japan allow the open door in Manchuria, and will Eussia allow 
the open door in Mongolia? There are pretensions rather incon- 
sistent with the adoption of such a policy in these parts, and I 
do not expect that in the present conference the open door could 
be at all pressed. But, as I suggest, a hint of it should be dropped 
now. When the real conference comes we shall have neutrals brought 
in, especially the United States, and the United States has been 



TEADE AGEEEMENTS ABEOAD. 27 

foremost in advocating the principle of the open door, especially 
in reference to China. Mr. John Hay, perhaps, originated it; cer- 
tainly he was energetic in pursuit of it; and it has been from his 
time down to the present the policy of every administration in the 
United States. It would be a great comfort if one could entertain 
the thought that out of this conference, with all its perplexities, 
with all its evil chances, with its threats of mischief and embroil- 
ments Avith our friends, difficulties with our allies, and exaspera- 
tion on the part of neutrals, we could see the way to adopt some 
rule of inclusion instead of exclusion, of united and friendly forces, 
of bringing together in the still undeveloped spaces of the world, 
where there is room for the introduction of European industry and 
capital, of the principle of association instead of the principle of 
antagonism, the principle of working together instead of the prin- 
ciple of continued and permanent animosity. I' beg to move. 

Moved, That there be laid before the House copies of (1) invi- 
tations addressed to His Majesty's Government to join in the con- 
ference of the allies on proposed trade regulations; (2) replies to 
such invitations; (3) instructions given to the representatives of 
the Government appointed to attend the conference. 

Viscount Brtce. My Lords, I shall not venture to follow my noble 
friend into the very large field which he has covered. I desire only 
to submit a few considerations which seem to make it very desirable 
that the greatest possible precaution and prudence should be ex- 
ercised by His Majesty's Government and by those who represent 
them as this conference. My noble friend, Lord Courtney, has de- 
plored the calling together of a conference at all. I will not enter 
into that question, which seems to me to be already past ; but I want 
to suggest a few reasons for the special caution which we ought to 
exercise at this time. 

I do not, and I do not think any of your lordships will, fail to under- 
stand the strengtli of the feeling which lies behind the proposal that 
we should make some arrangements Avhich would prevent our present 
enemies from behaving in the future as they have in the past, Mor 
do I in the least misunderstand, nor do I think any of your lordships 
misunderstand, the source of all this desire for a campaign of perma- 
nent hostility to Germany, prolonging the Avar of arms by a Avar of 
commerce. Nobody can deny that the people of this country and the 
people of France have received the greatest possible proA'ocation ; that 
there has been the strongest cause for indignation on account of the 
detestable and unheard-of methods which the German Government 
has pursued and is pursuing. It is A^ery natural that conduct like this 
should arouse the strongest feelings, and that those feelings should 
overflow into a sentiment that there should be no friendship again 
with those Avho have behaA^ed so badly, and that hostility must bo 
maintained eA-en when the Avar of arms is over. That is the kind of 
sentmient of Avhich at present AAe see so m\\nj signs in this country, 
and however much we regret its extreme manifestations we can not 
be altogether surprised that it should exist. 

We can understand, also, that there is a very strong feeling based 
upon what Ave have learned of the secret and surreptitious methods 
by which German merchants, at the suggestion and Avith the support 
of their Government, have endeavored to obtain control of certain 
large and important classes of raAv materials and of certain indus- 



28 TEADE AGREEMENTS ABROAD. 

tries, to acquire what would be practically a monopoly of those raw 
materials and of those industries. One can not be surprised that this 
has put people on their guard lest any policy of the kind should be re- 
peated in the future. There is therefore, I think, no objection in prin- 
ciple to the meditating and considering of any means that may be de- 
vised to avert in future the danger which would arise if, for instance, 
metals of prime necessity for the purposes of w^ar and for some of 
the industries of peace were to get into the hands of those who would 
use them as we know that German merchants and traders have been 
trying to use them for some time past. It is very unfortunate that 
German finance should have obtained the control that it had obtained 
in some European countries, and if that were to be attempted to be 
secured again by improper and surreptitious methods I can fancy a 
case might be made out for meeting those methods by some excep- 
tional action, action which would never have been suggested had it 
not been for the disclosure of what the Germans have done. There- 
fore so far we can quite understand that it is very natural that sus- 
picion should exist now, just as it is natural that passion should exist 
after the war owing to the methods which we have seen the German 
Government practicing. 

But, my lords, passion is a dangerous counselor. It is not wise 
when you are in a state of passion, however legitimate your indigna- 
tion may be, to allow your passion to cloud your reason and to 
prevent your considering with coolness and calmness what the result 
of your action may be. Let me try in a few words to put before 
you what I think are some of the features of the situation which 
ought to be considered with calmness and coolness. It is suggested 
by many of those who have taken part in the discussions about this 
approaching conference that our delegates should go with proposals 
of a very complicated nature, in the first place, a commercial 
war against Germany and her allies, and, secondly, commercial 
arrangements between our allies, ourselves, and our dominions for 
preferential tariffs. Is not all this, to use a familiar phrase, " too 
previous"? We are trying to settle before the war ends questions 
which can only arise when the war is over. We are talking as if 
things will be the same after the war as they are now. Was there 
ever a war which made such enormous changes in the commercial 
as well as in the political relations of the world and of the results 
of which it was so hard to form any prophecy whatever ? 

The only thing we can be said to know about the end of the war 
is that it will leave the world entirely ditferent from what it found 
it. That at least we can say. We can not tell what the state of the 
world will be for merchant purposes, but we know it will be differ- 
ent after such a catastrophe and convulsion as this war has brought 
about. I do not doubt for a moment that the allies will succeed. 
They have, I think, a distinct balance of forces in their favor ; and I 
suppose we all agree that from day to day the prospect of our 
success grows greater. But it is quite possible, granting success, 
that that success ma}^ come in different ways and in different forms, 
and we can not tell what those ways and forms will be. We have 
every ground for believing that all those who are now our allies will 
so continue, but we can not tell whether other nations may not 
come into the war. It is only Avithin the last few weeks that another 
nation did enter the war; and there are other nations, now neutral. 



TEADE AGEEEMENTS ABEOAD. 29 

of Avhich the same thing, as your lordships know, is quite possible. 
And, further, we have really no idea in what condition the enemy 
nations will be left by the war. Will Germany, for instance, then 
be anything like as formidable either for commercial or warlike pur- 
poses as she was at the beginning of the war? Can she resume that 
policy of commercial penetration which she carried on with such 
effect in countries where one of them was hostile and the other at 
any rate not friendly to her before ? 

According to all the financial authorities to whom one listens, Ger- 
many will have exhausted all her capital at the end of the war. 
Indeed, it is supposed that the only thing she will then have to go on 
with is a certain amount of raAv material which she has accumulated 
in some countries ready to be shipped to her as soon as peace arrives; 
but of her own capital she seems to have been almost entirely de- 
pleted. It was less than a year ago, I think, that her finance minister 
admitted that the financial position of Germany will be " practically 
desperate" after the war, except for one thing — namely, that she 
expected to receive large indemnities. During the last few months 
we have heard no more of those indemnities, and I think we may take 
it that the hope of obtaining any has now practically died away in 
German}^ Therefore those conditions which the finance minister 
foresaw of a practically bankrupt Germany seem to us very likely 
to arrive. 

If it be true, as I have tried to suggest to your lordships, that it is 
impossible to foresee the commercial conditions at the end of the 
war, either as regards Germany or as regards other nations, is it not 
impossible for us now to frame a policy adapted to conditions which 
we must admit to be unpredictable ? Were we to attempt to make a 
policy now we should have no certainty that it would be one which 
would be practicable, workable, or useful in the conditions which will 
arrive at the end of the war. And if we attempted it now, we should 
have to change it. I wonder whether those who speak so lightly of 
this system of tariffs, to which my noble friend Lord Courtney 
briefly referred and which has been much more elaborated in many 
organs of the press and by some speakers in this country, realize the 
prodigious difficulties which the working out of any such system must 
present. I am not going to follow my noble friend in the arguments 
which he presented. But your lordships will remember that some 
years ago this whole question was before the country. It was 
debated with great energy and acumen hj many powerful minds, 
and the longer it was considered the greater the difficulties seemed to 
be, and many of the schemes at first suggested had to be abandoned 
because their impracticability was demonstrated by discussion. I 
do not wish to tread upon any controversial ground. I merelj^ ask 
you to remember what happened then and how great were the diffi- 
culties which presented themselves, difficulties which Avere not over- 
come in the course of the discussions that then arose. If in a time of 
peace, when we could devote all our attention to those questions, we 
were unable to frame a scheme which met the difficulties and satis- 
fied the country, how much less likely is it that we should be able to 
do so now ? Some of the advocates of these proposals may say, " It 
is no doubt true that there will be many details to be settled and that 
there are difficulties — ^not unsurmountable difficulties — which will 
have to be dealt with, but we shall have time to consider them. The 



30 TRADE AGEEEMENTS ABROAD. 

details must be looked into. All we ask is that the matter should 
be agreed in principle." Is there anything more dangerous than 
agreeing to a thing in principle before you have considered whether 
it can be worked out in practice? To my mind nothing has more 
frequently betrayed people into dangerous courses than an assent, 
lightly given, to a principle which can not be applied in practice. 

I would like to add one more consideration. The conference which 
it is proposed to hold will be secret. It will be one to which the 
negotiators — if I may so call them — will go with no public opinion 
to watch them while they are at their work. I hope we may hear 
from the noble marquess that the instructions are of a very general 
kind, and that thej^ are such as will not authorize our representatives 
to commit His Majesty's Government to anything in particular. At 
the same time we must remember that the country is looking on with 
some anxiety at the present situation. It often becomes necessary 
in diplomatic negotiations to observe complete secrecy. There have 
been constantly cases arising in Europe in which secrecy was inevi- 
table and invaluable, and where you could not have made the neces- 
sary agreements without a secrecy which has prevented the rest of 
the world from knowing what you were doing. But surely no con- 
siderations of that kind can exist in a case like the present. What- 
ever arrangements are made in this case will have to be carried 
through by legislation. They would naturally affect the commercial 
interests of the country very nearly, and there is in the country an 
immense volume of intelligent and experienced public opinion to 
which any such proposals ought to be submitted. Is this not, there- 
fore, eminently a case for negotiating publicly ? I do not mean that 
we should ascertain what the other parties to the conference would 
like to have or give them any such views as we think can be given 
without raising expectations. But surely it is a case in which the 
country ought not to be committed to anything whatever without the 
fullest opportunity being given for the public canvassing of every 
proposition that is made. I suppose nobody will deny that the Gov- 
ernment are entitled to say that they go to this conference with an 
open mind. If it is an open mind in the fullest sense of the word, and 
a mind which is only there for the purpose of receiving suggestions 
and not making promises, nobody will be entitled to complain. But 
I submit not only that it is not a case for making promises, but that 
it is not a case for raising expectations or saying anything as to the 
probable action of this country which could lead to any anticipation 
that afterwards might not be fulfilled. I venture to believe that it is 
eminently the duty of those who go to the conference and negotiate 
on behalf of His Majesty's Government to do nothing which will in 
any way affect the absolute freedom of the people of this country to 
determine their whole fiscal polic3\ It has been a precious thing for 
us in the past that, as compared with other nations, we have been 
with our hands very free in the matter of fiscal policy, and it would 
be the greatest misfortune to depart from that attitude. 

One word in conclusion. It does seem to me very regrettable that 
so much should be done and said in the impression and belief that 
after the war of arms is ended another war is to begin. That is 
based upon the idea that the future state of Europe is to be one of 
permanent hatred dividing the great. peoples of the world. Surely 
there is no reason for such a despondent view as this. May we not 



TEADE AGREEMENTS ABEOAD. 31 

hope that it may be among the results of this war to discredit the 
whole policy which has brought this war about, to discredit it even 
in that place where it has had its strength and its seat; and ought 
Ave to act now as if we were looking forward to hatred, instead of 
hoping for the time when, out of the miseries that have been 
suffered, some good result will come in leading the leaders of nations 
to guide their steps into the wiser paths of peace ? 

The Lord President or the Council (the Marquess of Crewe). 
My lords, my noble friend on the cross benches (Lord Courtney), 
to whose speech the house, I am sure, listened with interest, recog- 
nizing as it always does the high plane on which my noble friend 
speaks, but at the same time I venture to think listened without any 
full measure of agreement, begins in his motion on the paper by mov- 
ing for copies of the invitations addressed to His Majesty's Govern- 
ment to join in this conference. On that subject I need only say a 
very few words. At the end of last year there were some conversa- 
tions between the French Government and ourselves, not of a very 
formal character, in the course of which the suggestion was made by 
the French Government that it would be advantageous if we could 
arrive at some common ground upon economical questions without 
sacrificing the freedom of the respective countries, and, if possible, 
also calling into council some others of our allies. I am not in a 
position to present any papers on the subject, because, as I have said, 
the conversations were not of a very formal character. But, speak- 
ing generally, it was proposed that a conference should take place 
on some current matters arising during the course of the war, and 
also upon some others which will have to be faced when the war is 
ended. Among the first was the question of a joint agreement on 
the subject of the prohibition of trading with the enemy. It was 
also suggested that we should discuss the scale and character of pro- 
hibited exports from this country in order to inflict as little mutual 
inconvenience between the different allies as possible in spite of such 
a prohibition. Then there were other questions arising after the 
war. One was suggestions for the reconstitution of trade in and be- 
tween the countries of our allies, and there was also — I am now 
coming on to ground which my noble friend thinks more dangerous — 
the question of considering the economical independence of the dif- 
ferent allies in the future. No formal reply has been sent to these 
informal proposals beyond an expression of willingness to send rep- 
resentatives to the conference. 

I am sorry to note that my noble friend regards the conference in 
itself as full of peril, and he considers it to be scarcely compatible 
with the aspirations expressed by the prime minister so long ago as 
the month after the outbreak of the war, and, as Lord Courtney 
stated, again implied in the words used to the French delegates last 
night. The prime minister spoke with regret of the competing ambi- 
tions of the past, as my noble friend has pointed out, meaning there- 
by, of course, the competing political and acquisitive means of differ- 
ent countries, and he expressed the hope that one result of the war 
might be the creation of a better mind in Europe — that is to say, that 
we should all have learned, through the tremendous sacrifices that we 
have made, lessons of wisdom when peace is once declared. We all 
hope that this may be so; and my noble friend evidently entertains 
the hope that these beneficial lessons will be as easily and as rightly 



32 TRADE AGEEEMEXTS ABEOAD. 

learned by Germany as by ourselves or by any of the allied countries. 
I wish I could be as sanguine as my noble friend. He has spoken of 
a part}^ in Germany who are wavering in their support of the war, 
and he quoted certain well-known instances of speakers and others in 
Germany who have not minced matters in speaking of their own 
Government and countrymen, and who, if one could believe appear- 
ances, would be prepared to make peace to-morrow on terms which 
conceivably the allies might accept. But I am afraid that my noble 
friend overrates. I Avill not say the strengtli. but the extent of that 
feeling in German}'. So far as the Government can ascertain there 
are small signs of wavering or of a desire for peace among those in 
Germany who are entitled to speak with any presumed weight of 
opinion behind them. I fear, therefore, that when my noble friend 
speaks of the discouragement which is intiicted upon those well-mean- 
ing people in the enemy country by the mere calling together of such 
a conference he is suffering under an illusion, a generous one, I am 
sure, but one which I believe to be in the strictest sense a dream with 
no reality behind it. 

My noble friend used one illustration, which, coming from him, I 
confess caused me a little surprise. He spoke with approval, know- 
ing, of course, all the circumstances as well as any of us, of the lenient 
attitude displayed by Count Bismarck, as he then was, to Austria 
after the battle of Koniggratz, which closed the Seven Weeks War. 
It is quite true that the Government of Berlin treated the defeated 
Austrian enemy with almost extraordinar}?' leniency, but the reason, 
as indeed my noble friend implied in the later sentences of his allu- 
sion to the subject, was founded entirely on the wisdom of the serpent. 
The establishment of German unity under the leadership of Prussia 
could only be brought about, in the first place, by the defeat of Austria 
in the field; but it could only be finally brought about by the defeat 
of France also in the field, the French Government bemg what it 
then was. With his customary foresight Count Bismarck, seeing that 
Avithin a few years he was bound to come to grips with France, was 
determined to win and to keep Austria quiet when that fateful 
moment should arrive. That was a very high and very ingenious 
policy no doubt, but if it is to be held up to us as a moral lesson of the 
kind of conduct that we ought to adopt after this war, I confess that 
from the point of view of ethics it seems to me to lack something by 
way of being regarded as an example. 

On the possibility of a post-bellum war directed against commerce 
ni}^ noble friend looks with dread, and he was not a little concerned at 
some sentences used by my right honorable colleague the president of 
the board of trade. It is true, no doubt, that language has been used 
which has been not quite fairly understood on the subject of the 
crushing of the militarism of Prussia and the crushing of German5^ 
What is it that Germany has done on the commercial side which has 
caused a great many people, both in France and in this country, to 
determine that she shall not have the poAver to continue in the same 
line of action in the years to come? My noble friend Lord Brj^ce 
has indicated in clear language what I desire to point out to the house. 
The fact is that Germany has combined commercial expansion with 
political intrigue with an audacity and, one must add, with a success 
which, so far as I know, has no parallel whatever in the past. There- 
fore when my noble friend tries altogether to separate German enter- 



TEADE AGREEMENTS ABROAD. 33 

prise from German militarism and the character of the German 
people from the ambitions of the German general staff he is, I ven- 
ture to think, undertaking an impossible task. I do not believe that 
you can, in fact, separate those military ambitions which have set 
the world on fire from the general aggressiveness of Germany all 
over the world. The picture which I gather my noble friend de- 
sired to sketch of, to borrow the title of a famous novel, two nations 
in Germany, one highly drilled and ready for every kind of aggres- 
sion on its neighbor, and the other of peaceful intent, only desirous 
to spread German civilization, whatever that may be, all over the 
world, is a picture in which it is not possible to believe. The poison, 
as I fear, has within the last 200 years permeated too deeply the 
whole of the German people. Therefore to look forward to an 
epoch when, as though after a riot, business can begin to be conducted 
again exactly on the old lines is, I fear, a hope that can not be 
realized. 

My noble friend was aware that the president of the board of 
trade and Mr. Bonar Law, and now, as we have found within the 
last few days, Mr. Hughes, are about to attend this conference, and 
he asked whether Mr. Hughes was able to attend it as in any way rep- 
resenting His Majesty's Government. Mr. Hughes will go, like the 
two ministers, as an imperial representative, and he will, I have no 
doubt, take a distinguished part in the deliberations of the confer- 
ence, not only from his well-known and admired powers of speech, 
but also from his determination to insist on the realities of the situa- 
tion as he believes them to be. In reply to my noble friend I may 
say that our representatives will go from this country with no in- 
structions except the general instructions to keep their eyes and 
minds open and to assist as far as possible in exploring the subjects 
which will be brought before the conference. They will go and they 
will return without committing His Majesty's Government to any 
definite course of action. 

I think my noble friend somewhat overrated the risk that the Gov- 
ernment of this country and even Parliament might find itself com- 
mitted, almost one would have thought from his language inveigled, 
into an undesirable course of action owing to language used by our 
representatives and by assumed agreement of theirs in future action 
of which the country would not approve. The three men who are to 
go are all experienced in political life, and it is not to be supposed, 
I think it is gratuitous to suppose, that they will be able to exercise 
so little command over the language they may use as to give impres- 
sions to our allies that they are entitled to commit this country to a 
certain course. They will be quite well aware that this is not m their 
power, and I am also certain that they will not desire to do it. The 
object 'of this conference is to study and examine as closely as pos- 
sible such subjects as I have mentioned as named by our French allies, 
in the first instance, and others which no doubt will occur to them 
in the course of discussion. It is clear that if I were able to answer 
my noble friend's question and state instructions I should be doing 
the very thino- of which I imagine he would most disapprove, because 
we should seSn then to be encouraging a priori judgments on ques- 
tions which it is the very object of the conference to study, and many 
of which, as my noble friend below the gangway (Lord Bryce) 

S. Doc. 491, 64-1 3 



34 TEADE AGREEMENTS ABROAD. 

very truly pointed out, can not by any possibility be finally adjudged 
at the present stage of the war. 

I am anxious not to follow my noble friend into the various details 
of the difficulties which might arise, and will some time undoubtedly 
arise, when questions of a closer fiscal union between different parts 
of the Empire, or to some extent between the allies — questions of the 
kind to which my noble friend alluded — come to be considered. How 
far questions such as those are likely to be considered in detail at the 
forthcoming conference I do not know. It does not appear to me 
likely, because this, as I think my noble friend himself said, can 
only be a preliminary conference. But the enumeration by my noble 
friend of those difficulties seemed to me not to enforce his argument 
so much as to enforce the desirability of discussing them, at any rate 
in their preliminary stages. Those difficulties either exist or they 
do not. At the appropriate time they will either have to be faced or 
they will have to be ignored. If they can not be ignored, which seems 
to be the only reasonable conclusion which it is possible to reach, 
surely it is impossible to begin to examine them in their broad out- 
lines too soon ; although once more I am in complete agreement with 
my noble friend below the gangway (Lord Bryce) that there are a 
great number of questions upon which at this stage it is impossible 
to express a final opinion. 

The term which I feel pretty confident would most arouse the 
alarm of my noble friend in what I have said of the French pro- 
posals is the term " economic independence," to which a number 
of different meanings might no doubt be ascribed. My noble friend 
dislikes the idea of a search after independence of other countries. 
On the other hand, as we all know, there are certain commodities 
for which every country declines to be dependent upon its neigh- 
l)ors, whether those neighbors be friendly or whether they may be 
under some kind of suspicion. Material of war of all kinds is, by 
common consent, not subject to the rules which so staunch a free 
trader as my noble friend would apply to every other commodity in 
the world. Nobody ever suggested that we should have been wise 
to depend for cannon upon Krupps, or that the German Govern- 
ment would have been wise to depend entirely on the Clyde or on 
Barrow for the building of submarines. Therefore when you come 
to discuss the possibilities of economic independence in the future, 
your mind may range far or it may only range within the imme- 
diate circle of one's vision; but it clearly is possible and lawful to 
enter into a discussion as to the various subjects and commodities 
for which we dare not in the future be dependent upon those who 
Iiave made so evil a use of our dependence upon them in the imme- 
diate past. 

I entirely agree with what fell from my noble friend, Lord Bryce, 
that it never could be wise for this country to frame its future 
commercial policy upon a frantic system of revenge, careless whether 
or not we inflict vast injury upon ourselves and upon the Empire 
by such a course. That, however, is by no means to say that cases 
may not arise, parallel to the ordering of guns from Essen, in which 
it may be necessary to sacrifice some commercial advantage in order 
to avoid greater possible dangers. All these questions demand, and 
I have no doubt will receive a great deal of anxious consideration 
DS, iwe all know, and it really did not need my noble friend to 



aHADE AGREEMENTS ABROAD. 35 

point it out, from a number of persons who by the nature of the 
case can not look at each proposal from precisely the same point 
of view. That is all the more reason, I venture to think, for early 
and preliminary exploration of as much of the ground as it is pos- 
sible to examine. 

I feel myself, and I have no doubt your lordships all feel, that it is 
hardly possible to multiply too greatly these opportunities for meet- 
ing and the exchange of ideas between representatives of the dif- 
ferent allied countries. We have an instance at this moment in 
this country in the visit of our parliamentary friends from France 
representing the senate and the chamber. They do not come with 
a rigidly laid down program for discussion, but I have no doubt 
that their conversations, although they are not, of course, of the 
same formal character as this forthcoming economic conference, will 
bear fruit in both countries by the influence they will exercise on 
public opinion. This economic conference is of a more regular and 
formal character, but it will have a parallel good effect, I venture 
to predict, in making the two countries more thoroughly acquainted, 
and it will serve, as I hope, as a prelude to those more important 
and final discussions the date of which it is altogether impossible 
for us to foresee but the material for which I am convinced can not 
be too soon prepared. 

Lord Courtney or Penwith. As my noble friend has no papers, I 
beg to withdraw the motion. 

Motion, by leave, withdrawn. 



[London Times, Apr. 20, 1916.] 
PARIS CONFEREXCE MR. BONAR LAW ON EMPIRE POLICY. 

The council of the Association of Chambers of Commerce issued 
yesterday an official report of the recent visit of a deputation to Mr. 
Bonar Law and Mr. Runciman on the subject of safeguarding certain 
British industries from enemy competition after the war. 

Mr. Bonar Law said: "There has been a good deal of misunder- 
standing about the Paris conference. It has been assumed that the 
representatives of the Government would go to that conference with 
their hands tied, without any possibility of taking any reasonable 
share in it. Nothing is further from the truth. We shall go there on 
precisely the same footing as the members of any other Government. 
The French Government are going to it, as we are, with the idea that 
we shall discuss the situation which has been created by the war and 
our relationship. We shall all be free to discuss it, and I can assure 
you that neither Mr. Runciman nor I will go with any fixed ideas, but 
we shall go with a desire to evolve some policy which will be of advan- 
tage to the Empire as a whole. If it was difficult for other Govern- 
ments to go to the conference with a fixed policy, it would have been 
impossible for us, for we represent, not only Great Britain, but the 
British Empire ; and it is quite clear that before anything is done the 
first step we must take is to work in conjunction with the other parts 
of the Empire." 

After urging that the only advantage they could hope to get from a 
clear declaration of policy — say, on the subject of a tariff to encour- 



36 TRADE AGREEMENTS ABROAD. 

age new industries — was the indication of the agreement between rep- 
resentatives of the two great parties, Mr. Bonar Law said : 

CHANGED PUBLIC FEELING. 

'' I do think there has been a great change in public feeling upon 
this subject as the result of the war, and I think I may venture to say, 
without any danger of a difference of opinion with Mr. Runciman — 
for it is quite right that, we should realize that there have been two 
views upon this question, and as a matter of fact the two views are 
represented by Mr. Runciman and myself — that this question will be 
considered from a new starting point altogether, that it will not be en- 
tirely a question of what will pay us that will decide our course in 
future. 

" In other words, I think we may say that these three principles are 
agreed upon : First, that security must be regarded as even greater 
than opulence. I think we are also agreed that the way in which the 
war was brought about by the Germans, and has been carried on by 
them, will not be forgotten by future generations in this country ; and 
whether it is right or wrong, and whether it pays or does not pay us, 
I do not believe that the people of this country will ever again allow 
the Germans to exploit the markets of the Empire as they did before 
the war. I do not sa}'^ we are agreed that there will be a preferential 
system with the colonies, but I am quite sure that the feeling of solid- 
arity in the Empire, which has been brought about by the feeding of 
sympathy and admiration here for what our colonies have done, will 
make us approach this subject with a real desire on the part of every- 
body, whatever their fiscal views, to meet the desires of the colonies. 

" It is clearly the duty of this Government to see to what extent we 
can get agreement on vital principles, to do everything in our power 
to get agreement, for behind all this question is the question of the 
union of the Empire. That will never be secured in the best way as 
the result of party quarrels, either in this country or anywhere else. 
Therefore, from every point of view, it is clearly our duty, and I 
shall certainly deal with the matter in that way, to see to what extent 
we can get agreement, and only if agreement is impossible should we 
fight about it. I feel that on all these subjects exactly the same thing 
applies as in regard to the conduct of the war and the continuance of 
this Government. I am sure that, so long as we are at war we ought 
not to quarrel among ourselves any more than we can help, and when 
the time for reconstruction comes, we ought not to quarrel any more 
than we can help then." [Cheers.] 



[London Times Trade Supplement, April, 1916.] 

British Trade Policy, 
closer relations with the dominions and allies. 

[By Sir Algernon F. Firth, president of the Association of Chambers of Commerce, 

United Kingdom.] 

There is no doubt of the desire of all but an insignificant minority 
of the inhabitants of the British Empire to perpetuate the friendship 



TEADE AGREEMENTS ABEOAD. 37 

and the close imderstanding between the British Empire and our 
allies in some economic pact to take effect after the war. What the 
changes in our present trade policy should be and what course we 
should adopt in our dealings with our dominions and allies are 
questions of the gravest importance — occupjdng the thoughts of the 
people of this country far more than the Government realizes. 

The war has opened our eyes to many things. It has shown us 
the weakness of our Empire as well as its potential strength. We 
have had no coordinated policy and strategy; no preparation for 
war; no preparation in financial matters; no regulation of shipping 
services ; no organization of our food supplies. We have had no con- 
structive imperial policy with regard to trade and commerce, nor 
any organized attempt to develop our trade and protect industries 
of vital importance to the country. When the war is over our 
Empire must discard the old system of drift. It must have a definite 
policy which will secure to the British race the fruits of its past 
sacrifices and efforts and the due reward for the heroic deeds of all 
its sons. 

A WARNING TO THE GOVERNMENT. 

Men are thinking with new light on old questions. They demand 
a lead and a clearly defined program. We all realize this, and our 
duty is to prepare at once in order to be able to adapt ourselves to 
the altered circumstances and new aims. The commercial com- 
munity recognizes this. On November 9 last the council of the 
association of chambers of commerce warned His Majesty's Govern- 
ment that on the conclusion of the war Germany would endeavor 
to pour into this country large quantities of manufactured goods at 
low prices in competition with the products of our own working 
people, depriving them of a market and thereby reducing employ- 
ment. The association asked the Government to prepare well in 
advance a plan to prevent unemployment thus caused, as well as to 
secure continuity of business for those who have undertaken enter- 
prises with a hope of obtaining a portion of the trade formerly 
done in competition with British subjects by those countries with 
whom we are at present at war. No announcement has yet been 
made by the Government, though it was considered in November — 
and it is still considered — that it will take many months to thrash 
out such a policy as is necessary. 

GREAT COMMERCIAIi CONFERENCE. 

That the country realizes the urgency of this matter was proved 
at the meeting held at the Guildhall on January 31 under the presi- 
dency of the lord mayor of London. The resolutions passed then 
were adopted practically unanimous]3^ That meeting was followed 
by a conference on February 29. It was the largest and most repre- 
sentative conference of chambers of commerce ever held. It was at- 
tended by 500 delegates from the 112 chambers of commerce which 
form the association. All the chambers had been supplied some 
months previously with proposals for consideration, drawn up by 
Mr. Arthur Michael Samuel, of the Norwich Chamber of Commerce. 
When the conference met these proposals had been exhaustively dis- 
cussed by the commercial communities in different parts of the coun- 



38 TRADE AGREEMENTS ABROAD. 

try. They were approved by many chambers ; extensions of the pro- 
posals and modifications were put forward by other chambers. The 
resolutions finally adopted at the conference represent the matured 
opinion of the whole body of chambers of commerce, whose combined 
membership exceeds 30,000 manufacturers, merchants, professional 
men, and traders in all parts of the United Kingdom. The resolu- 
tions were as follows : 

NATIONAL STRENGTH. 

This association desires to place on record for tlie guidance of those who fol- 
low us in days to come its firm conviction based on experience of war that the 
strength and safety of the Empire lie in ability to produce what it requires as 
largely as may be possible from its own soil and factories. (Two dissentients.) 

MINISTRY OF COMMERCE. 

That His Majesty's Government should take immediate steps to create a 
ministry of commerce and industry, with a minister holding cabinet rank and 
aided by a permanent advisory council consisting of representatives of the for- 
eign office, the colonial office, the Indian office, the self-governing over-sea domin- 
ions, and the leading commercial interests of the Empire. (Unanimous.) 

CONFERENCE WITH DOMINIONS. 

That His Majesty's Government be urged to take immediate steps to consult 
the Governments of the dominions overseas, and ascertain: (a) Their views in 
regard to the various trade problems arising as the result of the war, especially 
in regard to reciprocal trading, and (b) the regulation of trade relations with 
enemy countries and the control of businesses in the Empire managed or owned 
by the subjects of enemy countries, it being important that their views be first 
obtained before any definite steps are taken by this country. (Unanimous.) 

PROTECTION AND DEVELOPMENT OF INDUSTRIES. 

That His Majesty's Government be urged to inquire into the desirability of 
fostering and safeguarding those industries in this country which have since the 
commencement of the war been engaged in the manufacture of articles for- 
merly made to a large extent in enemy countries, or any industries which have 
in the past suffei-ed seriously from German and Austrian competition, and fur- 
ther, for the development of industries generally His Majesty's Government be 
urged to provide larger funds for the promotion of scientific research and train- 
ing, and to relax the present restrictions upon the subscription of capital for 
existing and new enterprises so far as may be consistent with the conduct of 
war. (Carried by a large majority.) 

RECIPROCAL TRADING RELATIONS AND TARIFFS. 

That this association is of opinion that, with the object of maintaining and 
increasing our trade after the conclusion of the war, it is necessary that the 
different parts of the British Empire be drawn into closer commercial union, 
and that our trading' relations with our allies be fostered, and that for the 
accomplishment of this purpose it is desirable that provision should be made: 
(a) For preferential reciprocal trading relations between all parts of the British 
Empire; (?>) for reciprocal trading relations between the British Empire and 
the allied countries; (c) for the favorable treatment of neutral countries; and 
(d) for restricting, by tariffs and otherwise, trade relations with all enemy 
countries, so as to render dumping or a return to pre-war conditions impos- 
sible, and for stimulating the development of home manufacture and the con- 
sequent increased employment of native labor. 

That His Majesty's Government be without delay requested by deputation 
from this association to invite representatives from the colonies and the allied 
countries to confer, in the first instance separately and subsequently collectively, 
with representatives from this country with the object of arriving at common 
action. (Carried by a very large majority.) 



TEADE AGREEMENTS ABROAD. 39 

NAVIGATION LAWS. 

That the association welcome the statement made by the president of the 
board of trade in the House of Commons on January 10 that no priviletces 
should be given to foreign shipping which are not enjoyed by our own, and that 
the handicap under which British shipping labors in this respect should be re- 
moved. They also welcome his condemnation of the existing laws under which 
subsidized foreign ships can make use of British ports and obtain the benefit of 
harbor facilities while escaping the payment of harbor dues, and they strongly 
urge His Majesty's Government to take such steps as will effectively remove the 
grievance. ( Unanimous. ) 

CONTROL OF COMPANIES. 

That legislation should be enacted under which His Majesty's Government 
shall have the power to insist that any companies or firms producing, manufac- 
turing, or trading in the United Kingdom, India, or the Crown colonies shall be 
British controlled, both as regards management and ownership — also that in the 
event of enemy companies or firms being permitted to reopen or commence trad- 
ing in any part of the United Kingdom, India, and the Crown colonies, they 
shall be subject to such control and inspection as shall make it impossible for 
them to be used as political agencies under the guise of commercial establish- 
ments. (Unanimous.) 

EMPLOYMENT OF ENEMY SUBJECTS AFTER THE WAR. 

That legislation should be promoted to prevent enemy subjects for a period 
after the war from taking up employment or a domicile in this country without 
special license. (Carried.) 

CONSULAR SERVICE. 

That the present consular arrangements are not of an adequate nature in 
view of the enormous trade of the Empire, and that steps be taken to reorganize 
the consular service with a view to providing better facilities for the mainte- 
nance and expansion of the trade of the Empire. (Unanimous.) 

CREDIT BANKS. 

This association is of the opinion that it is important that the Government 
should consider the desirability of facilitating the establishment of a large credit 
bank, or banks, for the purpose of developing British trade abroad. (Unani- 
mous. ) 

The first resolution is a declaration of faith for guidance in the 
future. Production within the Empire (and it follows as a natural 
sequence within each nation of the Empire) is of vital importance. 
Power of production must come before exchange of commodities. 
No one suggests, or has suggested, that anything should be done to 
diminish the accumulated wealth of the United Kingdom, whether 
it be represented in the power to produce or in symbols of value, 
but the contrast made was a very good and useful one. 

The nation which relies in a very large measure on exchanging 
goods produced elsewhere and in accumulating symbols of value to 
the neglect of the development of power to produce, falls very much 
into the category in which the Dutch found themselves at the end 
of the Thirty Years' War, when Amsterdam was the financial center 
and warehouse of the world. The Dutch were the richest people, and 
yet Dutch commerce was bound to decay, because it was not founded 
upon the solid rock of power of production. 

That we are not producing in this country as much as we ought 
is known to everyone. A striking example is that of agriculture. A 
report was recently published by a departmental committee ap- 
pointed by Lord Selborne and presided over by Lord Milner. That 



40 TRADE AGREEMENTS ABROAD. 

report has not received the attention it deserves. All its members 
except three signed the following statement: 

We desire to place on record our opinion tliat it is necessary and practicable 
to produce within this country a very large proportion of the foodstuffs and 
other agricultural products natural to its soil, and now purchased abroad at a 
cost of nearly £300,000,000 per annum, two-thirds of Avhich are derived from 
countries outside the British Empire. We believe that this can be done to the 
physical, social, and economic advantage of the country. 

MiLNEE. 

Edwaed G. Steutt. 
C. W. Fielding. 
A. D. Hall. 

Rowland E. Peothero. 
J. A. Seddon. 

The signatures are those of men who know what they are talking 
about, and, however startling such a statement may seem, it deserves 
the earnest consideration of everyone. 

As to the output of our industries, it is possible that this can be 
enormously increased even with our existing means of production. 
By our present sj^stem of free access to our markets for foreign pro- 
ducers, by the freedom of our administration of our patent laws, 
trade-marks, etc., by our system of almost free entry for foreign 
shipping, and in many other ways, there has been no recognition of 
the fact that production at home is infinitely preferable to the pur- 
chase of goods abroad, even at a slightly reduced price. Had only 
the principle been recognized of stimulating production at home by 
every means in our power and of utilizing the Empire's resources 
in the interests of British people, the raw materials of the Empire 
would naturally have gravitated to British industries, and we should 
not have found ourselves deprived at the outbreak of the war of 
many things that were essential for our industries and also for 
national defense. What we need is that we should be more self- 
sustaining and produce more, so as to improve the status of our 
population. This is the principle that the first resolution affirms. 

MINISTRY OF COMMERCE. 

The second resolution as to the ministry of commerce has been 
affirmed so often and is supported in so many influential quarters 
that it does not need dwelling upon. The need is for a department 
of the State which will take all commercial matters under its care, 
devote its energies and the services of the best brains it can com- 
mand to the strengthening and development of our commerce. The 
board of trade is so choked up with administrative functions that it 
is impossible for it to give the consideration which is needed to the 
many problems daily arising in connection with imperial and foreign 
commerce. Especially at the present moment, when these problems 
ought to receive the attention of the ablest minds that can be devoted 
to them, is it essential that a new department should be created 
absolutely free to devote its whole thought and care to commercial 
questions, and with time to consult the most experienced men in all 
branches of business for advice as to what is necessary. 

The other eight resolutions deal with matters that ought to receive 
the attention of the whole Government immediately, and afford 
ample work for the time being for the proposed new ministry of 
commerce. 



TRADE AGREEMENTS ABROAD. 41 

IMPERIAL POLICY. 

In its broad aspects the imperial policy that ought to be followed 
is plain. First and foremost, we must establish our imperial trade 
on a sure and lasting foundation of mutual concession for mutual 
benefit. The outbreak of war showed us how dangerous was the 
position into which we had drifted. We had traded with our secret 
and potential enemies on exactly as favorable terms as we had traded 
with our own dominions, where to a man the population was ready 
to fight for the common cause. We had done almost nothing to 
strengthen the bonds of trade between our own dominions and the 
mother country. Many projects had been brought up, but none had 
received Government support. Not only was this the case, but it 
had actually been possible for our potential enemies to secure control 
of imperial supplies of raw materials and " key " industries which 
were needed for the defense of the Empire. It is unnecessar}^ to 
elaborate this point, because it has been explained again and again. 
The important thing is to see that such cases never occur again. 

A means must be found of making it to the advantage of our 
dominions to deal with the mother country, and to the advantage 
of capitalists to embark on enterprises within the King's dominions 
in preference to investing their money in projects which serve to 
strengthen potential enemies. Within the British dominions there 
is ample scope for enterprise in the investment of capital, and some 
means must be found of encouraging to the utmost the development 
of the resources of the Empire. 

TRADE WITH ALLIES. 

A conference with the dominions is the first step to be taken. The 
question of reciprocal relations with our allies and tariffs would 
naturally follow, and it is to be sincerely hoped that something 
definite will result from the eagerl}^ expected Paris conference. 

For several generations past Britain has imagined that she could 
hold herself aloof from the continental system, and thereby render 
herself free from being drawn into continental wars. It has now 
been proved that for her own national preservation she had to enter 
it, although reluctantly. 

She has hitherto preferred to act as intermedial^-, carrier, or clear- 
ing house for foreign nations, making large profits out of handling 
the productions and financing the paper symbols which represented 
the productions of the soil and factories of other nations. Often 
she never had any further interest in those foreign productions be- 
yond commissions earned by finding money to distribute them for 
the foreign nations that produced or consumed them, or in the car- 
rying of them in her ships for profit. Britain's banking and dock 
systems thus became rather international than national, with the 
inevitable result that she was content to neglect her own national 
production so long as she could earn money on the brokerage and 
carrying of foreign productions. We have seen the result of this 
policy. The lack of power to produce essentials in this country 
that was felt after war broke out has probably added hundreds 
of millions to the British debt incurred for the prosecution of the 
war. The eyes of the capitalist classes have been opened, and the 



42 TRADE AGREEMENTS ABROAD. 

eyes of the equally patriotic working classes have also seen how 
dangerous it is for their own safety to restrict output. There is no 
need for such things as Sunday labor and overtime. Efficient human 
work requires ample hours of rest or recreation, but it is necessary 
to urge very strongly that any trade-union restrictions which pre- 
vent workingmen putting forth their utmost efforts actually jeopard- 
ize the safety of the State even in times of peace. 

BANKING. 

Whether British banks have done all that they might have done 
for the support of British trade is a question that has been raised, 
and is discussed in another part of this issue. But the disposition 
of the business world is quite rightly less to find a scapegoat than 
to see that in the future matters are placed on a very different foot- 
ing. The very able and forcible speech of Sir Edward Holden 
at the conference created a very great impression, and there is reason 
to believe that his wise advice is being well studied and will have 
definite results. It is to be hoped that the scheme he foreshadowed 
whereby bankers and traders will cooperate in forming a very large 
foreign bank will result in something useful, and, if Government 
assistance in its initial stages should eventually be found necessary, 
that this will be accorded in no reluctant manner. 

SHIPPING. 

The question of shipping is in itself one of vast importance. 
There are some thoughtful economists who regard interimperial 
transport as providing a possible means of solving the vexed ques- 
tion of preferential trade; but the matter is far too complicated to 
be dealt with incidentally in a general review such as this must 
necessarily be. The value of other items in the program depends 
upon the methods by which they are carried out. 

"What we have now to do is to exert ourselves in an ordered, prac- 
tical, and determined manner in order to maintain that leading 
position in the commerce of the world which we have held for so 
long, and which is vital to our continued extension as an Empire. 
We have lapsed into a spirit of apathy and conservation in com- 
mercial matters, and we have suffered from our insularity and from 
continuous official discouragement. There is no doubt the trader 
will respond when he finds substantial help and practical encourage- 
ment in an available and effective form. We need, in connection 
with our trade, method, science, investigation, organization, assist- 
ance, and a rallying point for guidance and stimulus. After the 
war this will be a different country with a new vision. Our Empire 
will be united, and filled with a new spirit of mutual sympathy and 
help. We shall be living in a world of new alliances, new ambitions 
and friendships. Let us be prepared in time to avail ourselves of 
the altered circumstances, and so emerge from this time of trial with 
our commercial position rejuvenated and strengthened, and with 
the minds of business men able to look forward to a more prosperous 
future. 



TEADE AGREEMENTS ABROAD. 43 

[Spectator, London, June 17, 1916, pp. 743, 744.] 
THE PARIS ECONOMIC CONFERENCE. 

The economic conference of the allied powers has at last met, and is 
at this moment at work. On the whole, little, if anything, has been 
lost by the frequent postponements which have occurred, although 
on personal grounds most people will regret the absence of Mr. Runci- 
man through his unfortunate illness. The task before the conference 
is one of great importance, but hedged around with diiRculties. Leav- 
ing aside the purely temporary purpose of settling upon arrange- 
ments for blockading German trade during the war, the main busi- 
ness of the conference is to organize methods for preventing, after the 
war, Germany's resumption of her past commercial methods. On 
the importance and the desirability of this object we are all of us 
agreed ; but only harm will result if we deliberately shut our eyes to 
the difficulties to be overcome, and imagine that the end can be 
achieved by mere shouting. Looking at the problem in the first in^ 
stance from the point of view of British opinion, we have to recog- 
nize that the old shibboleths can no longer be invoked by either party 
to past fiscal controversies. On the one hand, as has been constantly 
urged in these columns, free traders must frankly acknowledge the 
fact that principles which they regarded as demonstrably sound under 
peace conditions are not applicable under the conditions of quasi- 
warfare, which will certainly continue to exist when the present war 
comes to an end. It is equally important for tariff reformers to re- 
member that their primary conception of protection for the home 
market conflicts fundamentally with schemes for combined action on 
the part of the allied powers. In laying down this second proposition 
it is important to make our own position perfectly clear. We entirely 
repudiate the idea that either France or Russia, while maintaining 
her protective system against us, has any right even to expect that we 
should necessarily maintain a free import system for her benefit. We 
do not claim any right to interfere with their domestic arrangements, 
and we may assume that they equally recognize our right to establish 
domestic protection for ourselves if we should decide that it is in our 
own interest so to do. The point is that it is almost impossible for 
British ministers simultaneously to work for joint action with our 
allies against Germany, and also for domestic protection against 
those allies. In turn, when our allies come to consider how practi- 
cally to establish working arrangements with Great Britain for de- 
fense against the common enemy, they will probably find that their 
system of domestic protection seriouslj^ hampers their freedom. 
Whether they will be able in practice to modify that system in the 
face of internal political pressude is another matter. 

The same considerations apply to our own dominions, and the 
same difficulties arise. Both free traders and protectionists in Eng- 
land have often dreamed of the desirability of establishing a com- 
plete system of free trade within the British Empire. We may be 
nearer to the realization of that dream than ever before, but we cer- 
tainly can not yet see it taking shape. In all the dominions the pro- 
tectionist spirit is still strong. Hitherto all that has been done in 
the way of encouraging trade relations between different parts of the 
Empire has been through the establishment of colonial preferential 



44 TRADE AGREEMENTS ABROAD. 

tariffs; but in practice these tariffs have nearly alwaj^s been arrived 
at, not by lowering the colonial duties on British imports, but by rais- 
ing the duties on foreign imports. In other words, the dominions 
have hitherto followed the policy of domestic protection even against 
the mother country and against one another, while increasing the 
scale of protection against foreign countries. In saying this we are 
not blaming or criticizing the colonial governments; we are merely 
noting the facts. At the moment it does not seem that either in 
France or Russia or Italy or in our own dominions is there any great 
prospect of the abandonment of the policy of domestic protection. 
Consequently the practical question which the Paris conference has 
to consider is how far it is possible to fit in this policy of domestic 
protection with the wider policy of allied action against the German 
enemy. On such a point no general principle can be laid down ; the 
matter is obviously one of detail, and the details must depend on 
future rather than on present facts. There is, however, one very 
important point wdiich ought at once to be dealt with. If the allied 
powers are to take in the future common action against German 
commercial methods, they must have their hands free to impose 
tariffs upon German goods which they do not impose upon the goods 
of one another. That means that Germany must not be entitled to 
claim most-favored-nation treatment. 

This is of all points perliaps the most immediately important for 
the Paris conference to settle. In the treaty of Frankfort, which 
ended the Franco-Prussian War of 1870, there was inserted a perma- 
nent most-favored-nation clause regulating the commercial arrange- 
ments of France and Germany. This clause was inserted at the re- 
quest of France, but most French people seem to be agreed that it was 
Germany who drew the greatest advantage from it. At anj^ rate, 
there is not likely to be any French opposition to a refusal to insert 
a similar clause in any treaty of peace that may follow the present 
war. Nor need there be any opposition from Great Britain. It is 
true that the most-favored-nation clause, which forms part of our 
commercial treaties as well as of those between other powers, has on 
the whole served us well. It may be, as is alleged, that in particular 
cases the Germans have dodged the obvious meaning of the clause by 
introducing extremely complicated definitions of goods, so as to ob- 
tain advantages for themselves, while denying them to the other con- 
tracting power. Apart from this trickery, the clause has had the 
advantage of enabling our exports to profit by any reductions in 
tariff that any other nations agreed upon between themselves. Never- 
theless, we must now be prepared to sacrifice that advantage, whatever 
it may have been worth. For unless the allied powers reserve the 
possibility of establishing preferential tariff arrangements among 
themselves, they will be able to do very little indeed to counteract 
German commercial methods. 

Up until quite recently the question of x^referential trading has 
generally been approached from the point of view of import duties. 
But it is clearly possible, and may -even be more important, to deal 
with it also by means of export duties; and one of the points which 
will probably be discussed in Paris is the possibility of reserving 
natural products to the manufacturers of the allied powers by means 
of a system of preferential export duties. 



TEADE AGREEMENTS ABROAD. 45 

[Saturday Review, London, June 17, 1916, pp. 576-578.] 
THE ECONOMIC CONFERENCE IN PARIS. 

On Wednesday morning the economic conference in Paris began 
its work. Sixty delegates were present, representing the eight allied 
powers, and the French premier welcomed them. Again and again 
this essential conference has been postponed by politics, and the 
French have disliked the delays. Even now, according to the Times, 
a bad influence from this country is active in Paris. More than one 
private correspondent, when visiting the chief public men in France, 
has been told that persistent attempts are made from England to 
disparage Mr. Hughes. We are given to understand, says these 
Frenchmen in effect, that Mr. Hughes is an outsider who speaks for 
no one but himself, and that attention paid to him will " offend " the 
British Government, the " official " British delegates being Mr. 
Bonar Law and Lord Crewe. " Suggestions of this kind would be 
incredible if the authority for their existence were not so good." 
The tactics of Cobdenism are evident in these attempts to make 
mischief. 

Cobdenism is troublesome enough in its own country ; but consider 
what it must be to Frenchmen, who have got rid of party labels, and 
whose inbred logic has been intensified by their enormous sufferings 
and sacrifices. They know and admit that their country let herself 
be harmed by the predatory methods of German trade, and they are 
determined that Prussianized industry ^nd finance shall be held 
sternly in check after the war. Never again shall " peaceful " pene- 
tration betray France into weakness akin to suicide. While Ger- 
many matured her economic policy in order to prepare a way for 
military invasion, France neglected her strategic railways, even in the 
neighborhood of Verdun, and proved in other ways that a habit of 
chattering about peace had made her utterly reckless. After a week 
of war this fact was self-evident to her people, and hence we can 
not suppose that Frenchmen are at all willing to be patient with the 
follies of Cobdenism. They will find it easy at the conference to 
suppressed the most important part of Mr. Hughes's doctrine? Yet, 
be encouraged by the fact that certain newspapers in England have 
suppressed the most important part of Mr. Hughes's doctrine ? Yet, 
of course, it is necessary that the rational Frenchmen and the devious 
Cobdenite should try to understand each other, since they are called 
upon to live together on good terms in an alliance essential to both. 

There is nothing at all to grasp in the French point of view, 
because it is in accord with the resolutions passed by British cham- 
bers of commerce, and also with the convictions expressed last week 
by the British imperial council of commerce, that greeted with 
enthusiasm a detonating speech by the prime minister of Australia. 
The policy of economic unity and self-defence among the entente 
powers is one of those very reasonable things that test to the full the 
trading customs and the moral and political prevision of many 
peoples. It makes its appeal to a large portion of civilized man- 
kind, to Eussia, France, Italy, Japan, Belgium, Portugal, and the 
multitudinous British Empire. It is a policy to which neutral and 
friendly nations can offer no opposition because its governing prin^ 
ciple is equitably reciprocity in the trading relations of all countries. 



46 TEADE AGEEEMENTS ABEOAD. 

It seeks to put Germany under discipline because she tried to impose 
economic slavery on those who traded with her, and because she is 
collecting wares of many sorts to dump into those markets that she 
ravaged in her prewar aggression. Germany makes no secret of the 
fact that she regards finance and trade as weapons of planned at- 
tack, and she hopes that the middleman's influence in Great Britain, 
United to the theorist class of Cobdenites, will defeat the forming 
of an economic league to protect the allies from her next campaign 
in "peaceful penetration." 

[The Times, London, June 21, 1916, pp. 9-10.] 

An Economic Pact, 
pakis conference decisions allied trade for the allies. 

The recommendations of the economic conference of the allies, held 
in Paris on June 14, 15, 16, and 17, were issued by the board of trade 
last night, and their full text is published below. The conference 
dealt with, and the recommendations cover, three periods — the 
V/ar period, the reconstruction period in those countries or portions 
of country which have been in enemy occupation, and the peace 
period. 

The substance of the recommendations is as follows : 

WAR PERIOD. 

Coordination of the laws and regulations in the allied countries 
prohibiting trading with the enemy. 

Absolute emiiargo on importation of goods originating in or com- 
ing from enemy countries. 

Sequestration or control of businesses owned or operated by enemy 
subjects. 

Stringent measures for restriction of enemy supplies. 

RECONSTRUCTION PERIOD. 

Devising of joint means to secure to countries suffering from acts 
of destruction, unjust requisition, the restoration of their raw ma- 
terials, industrial and agricultural plant, stock, and mercantile fleet, 
or to assist them to reequip themselves in these respects. 

Denial to the enemy powers, for a period to be fixed by agree- 
ment, of " most-favored-nation " treatment. 

Conservation for, and interchange between, the allied countries of 
their natural resources. 

Protective measures against enemy " dumping " and for prevent- 
ing enemy subjects in allied countries from engaging in industries 
which concern national defense or economic independence. 

PEACE PERIOD. 

MEASURES TO BE TAKEN. 

To render the allied countries independent of enemy countries in 
l"aw materials and manufactured articles essential to the normal de- 
velopment of their economic activities. 



TRADE AGREEMENTS ABROAD. 47 

To facilitate and improve the interchange of their products. 

To assimilate the laws governing patents, indications of origin, 
and trade-marks, and for the adoption of an identical procedure in 
regard to patents, trade-marks, and literary and artistic copj^right 
which have come into existence in enemy countries during the war. 

THE RECOMMENDATIONS. 

FULL TEXT. 

I. The representatives of the allied Governments have met at Paris 
under the presidency of M. Clementel, minister of commerce, on 
June 14, 15, 16, and 17, 1916, for the purpose of fulfilling the man- 
date given to them hj the Paris conference of March 28, 1916, of 
giving practical expression to their solidarity of views and inter- 
ests, and of proposing to their respective Governments the appro- 
priate measures for realizing this solidarity. 

II. They declare that after forcing upon them the military con- 
test in spite of all their efforts to avoid the conflict, the Empires of 
central Europe are to-day perparing, in concert with their allies, for 
a contest on the economic plane, which will not only survive the 
reestablishment of peace, but will at that moment attain its full 
scope and intensity. 

III. They can not therefore conceal from themselves that the 
agreements which are being prepared for this purpose between 
their enemies have the obvious object of establishing the domination 
of the latter over the production and the markets of the whole 
world and of imposing on other countries an intolerable yoke. 

In face of so grave a peril the representatives of the allied Gov- 
ernments consider that it has become their duty, on grounds of neces- 
sary and legitimate defense, to adopt and realize from now onward 
all the measures requisite on the one hand to secure for themselves 
and for the whole of the markets of neutral countries full economic 
independence and respect for sound commercial practice, and on 
the other hand to facilitate the organization on a permanent basis 
of their economic alliance. 

For this purpose the representatives of the allied Governments 
have decided to submit for the approval of those Governments the 
following resolutions : 

(A) MEASUEES FOE THE WAE PEEIOD. 

I. The laws and regulations prohibiting trading with the enemy 
shall be brought into accord. 

For this purpose : 

(a) The allies will prohibit their own subjects and citizens and 
all persons residing in their territories from carrying on any trade 
with: (1) The inhabitants of enemy countries whatever their 
nationality; (2) enemy subjects wherever resident; (3) persons, 
firms, and companies whose business is controlled wholly or partially 
by enemy subjects or is subject to enemy influence and whose names 
are included in a special list. 

(&) They will prohibit the importation into their territories 
of all goods originating in or coming from enemy countries. 



48 TEADE AGEEEMENTS ABEOAD. 

(c) They will devise means of establishing a system enabling 
contracts entered into with enemy subjects and injurious to national 
interests to be canceled unconditionally. 

II. Business undertakings owned or operated by enemy subjects 
in the territories of the allies will all be sequestrated or placed under 
control ; measures will be taken for the purpose of winding up some 
of these undertakings and of realizing their assets, the proceeds 
of such realization remaining sequestrated or under control. 

III. In addition to the export prohibitions which are necessitated 
by the internal situation of each of the allied countries, the allies will 
complete the measures already taken for the restriction of enemy 
supplies, both in the mother countries and in the dominions, colonies, 
and protectorates : 

(1) By unifying the lists of contraband and of export prohibi- 
tion, and particularly by prohibiting the export of all commodities 
declared absolute or conditional contraband. 

(2) By making the grant of licenses for export to neutral countries 
from which export to enemy territories might take place condi- 
tional upon the existence in such countries of control organizations 
approved by the allies; or, in the absence of such organizations, 
upon special guaranties such as the limitation of the quantities ex- 
ported, supervision by allied consular officers, etc. 

(B) TRANSITORY MEASURES FOR THE PERIOD OF COMMERCIAL, INDUSTRIAL, AGRI- 
CULTURAL, AND MARITIME RECONSTRUCTION OF THE ALLIED COUNTRIES. 

I. The allies declare their common determination to insure the re- 
establishment of the countries suffering from the acts of destruction, 
spoliation, and unjust requisition, and decide to join in devising 
means to secure the restoration to those countries, as a prior claim, 
of their raw materials, industrial and agricultural plant, stock, and 
mercantile jfieet, or to assist them to reequip themselves in these 
respects. 

II. Whereas the war has put an end to all the treaties of commerce 
between the allies and the enemy powers, and whereas it is of essen- 
tial importance that, during the period of economic reconstruction 
which will follow the cessation of hostilities, the liberty of none of 
the allies should be hampered by any claim put forward by the 
enemy powers to most-favored-nation treatment, the allies agree that 
the benefit of this treatment shall not be granted to those powers 
during a number of years to be fixed by mutual agreement among 
themselves. 

During this number of years t)ie allies undertake to assure to each 
other so far as possible compensatory outlets for trade in case con- 
sequences detrimental to their commerce result from the application 
of the undertaking referred to in the preceding paragraph. 

III. The allies declare themselves agreed to conserve for the allied 
countries, before all others, their natural resources during the whole 
period of commercial, industrial, agricultural, and maritime recon- 
struction, and for this purpose they undertake to establish special 
arrangements to facilitate the interchange of these resources. 

IV. In order to defend their commerce, their industry, their agri- 
culture, and their navigation against economic aggression resulting 
from dumping or any other mode of unfair competition, the allies 
decide to fix by agreement a period of time during which the com- 



TEADE AGREEMENTS ABEOAD. 49 

merce of the enemy powers shall be submitted to special treatment 
and the goods originating in their countries shall be subjected either 
to prohibitions or to a special regime of an effective character. 

The allies will determine by agreement through diplomatic chan- 
nels the special conditions to be imposed during the above-mentioned 
jDeriod on the ships of the enemy powers. 

V. The allies will devise the measures to be taken jointly or sev- 
erally for preventing enemy subjects from exercising, in their terri- 
tories, certain industries or professions which concern national de- 
fense or economic independence. 

(C) peemaxe>;t ieeasxjees of mutual assistance and collaboration among 

THE allies. 

I. The allies decide to take the necessary steps without delay to 
render themselves independent of the enemy countries in so far as 
regards the raw materials and manufactured articles essential to the 
normal development of their economic activities. 

These measures should be directed to assuring the independence of 
the allies not only so far as concerns their sources of supply, but also 
as regards their financial, commercial, and maritime organization. 

The allies will adopt such measures as may seem to them most suit- 
able for the carrying out of this resolution, according to the nature 
of the commodities and having regard to the principles which govern 
their economic policy. 

They may, for example, have recourse either to enterprises subsi- 
dized, directed, or controlled by the Governments themselves, or to 
the grant of financial assistance for the encouragement of scientific 
and technical research and the development of national industries 
and resources; to customs duties or prohibitions of a temporary or 
permanent character ; or to a combination of these different methods. 

Whatever may be the methods adopted, the object aimed at by the 
allies is to increase production within their territories as a whole to 
a sufficient extent to enable them . to maintain and develop their 
economic position and independence in relation to enemy countries. 

II. In order to permit the interchange of their products, the allies 
undertake to adopt measures for facilitating their mutual trade rela- 
tions both by the establishment of direct and rapid land and sea 
transport services at low rates, and by the extension and improve- 
ment of postal, telegraphic, and other communications. 

III. The allies undertake to convene a meeting of technical dele- 
gates to draw up measures for the assimilation, so far as may be pos- 
sible, of their laws governing patents, indications of origin, and trade- 
marks. 

In regards to patents, trade-marks, and literary and artistic copy- 
right which have come into existence during the war in enemy coun- 
tries, the allies will adopt, so far as possible, an identical procedure, 
to be applied as soon as hostilities cease. 

This procedure will be elaborated by the technical delegates of the 
allies. 

Wliereas for the purposes of their common defense against the 
enemy the allied powers have agreed to adopt a common economic 
S. Doc. 491, 64-1 4 



50 TRADE AGREEMENTS ABROAD. 

ipolicy, on the lines laid down in the resolutions which have been 
passed, and whereas it is recognized that the effectiveness of this 
policy depends absolutely upon these resolutions being put into opera- 
tion forthwith, the representatives of the allied governments under- 
take to recommend their respective governments to take without de- 
lay all the measures, whether temporary or permanent, requisite for 
giving full and complete effect to this policy forthwith, and to com- 
jnunicate to each other the decisions arrived at to attain that object. 



MR. HUGHES ON THE DECISIONS. 
KEED OF IMMEDIATE ACTION. 

Mr. Hughes, in a statement to the French press, sajs of the con- 
ference : 

The Paris economic conference has done good work. Indeed, when 
one considers that the delegations of the allied powers were in effect 
confronted with the task of formulating the terms of an economic 
treaty which would absolutely revolutionize not only the trade rela- 
tions between their respective countries, and with those of the central 
powers, but also the entire economic fabric of the allied nations, the 
conference may be said not only to have done good work but great 
work. 

The scope of the resolutions unanimously^ agreed upon is very wide. 
They cover the period of the war and of transition. They lay down 
the basis of a sound and practicable permanent economic policy. 
Their potential effects are almost infinite. They indicate a way by 
which the great rivers of commerce can be diverted from those chan- 
nels along which, before the war, Germany had with masterly cun- 
ning contrived to guide them, to the great advantage of herself and 
the detriment of the allies, to others controlled by the allies which 
will distribute the benefits more evenly. They provide the materials 
out of which we may build up an economic system which will afford 
ample facilities for developing the great resources of the allied pow- 
ers, secure and control those raw materials upon which material pros- 
perity and national hafety depend, and enable the allied powers to 
meet Germany at least on equal terms in the markets of the world. 

When we remember that these resolutions, if ratified by the Gov- 
ernments of the allied powers, will materially afl'ect, if not funda- 
mentally change, the trade relations and economic arrangements of 
nearly 600,000,000 of the world's inhabitants, we realize what mighty 
interests are involved. When we consider how much has to be done 
in order to give effect to them, we may admit that if the occasion for 
such change were less imperative even the most resolute of men might 
well hesitate to face a task so gargantuan. But because it has to be 
done it will be done. And we must start to do it without a day's 
delay. 

I have said that the work of the conference is good ; nay, that, all 
things considered, it even merits the term " great." But we must not 
forget that in themselves the resolutions are nothing ; that the func- 
tions of the conference were to recommend what needs to be done, 
not to do it. The resolutions of the conference are to the work before 



TEADE AGREEMENTS ABROAD. 51 

US what the plans of the architect are to the builder. We must prove 
to the central powers and the world that we are in earnest. We must 
set to work. Action must be our watchword. And not to ^ct 
promptly is, so far as results go, as fatal as not to act at all. While 
this necessity for immediate action applies to all the allies, it applies 
to Great Britain in a special way. To speak plainly, the proposals of 
the Paris conference are mere empty words unless Great Britain takes 
immediate steps to give effect to them. The other allies look to her 
to lead the way. They expect her to breathe into the dry bones of 
their agreement the breath of life. 

Some of the allies were before the war so completely enmeshed in 
the toils of Germany that they had lost all but the shadow of their 
nationality, and even now they are obsessed with the fear that peace 
will find them again in the economic grip of the enemy. The resolu- 
tions of the Paris conference, if we take prompt action to give effect 
to them, can be made a most effective weapon against our enemy dur- 
ing the war, shortening its duration, assuring to the allies the fruits 
of victory, their economic independence after the war, and a lasting 
peace to the world. It is our place to show the allies a lead ; nothing 
prevents us from doing so ; everything urges us on. It is to Britain 
that all the allies turn with expectant eyes. And they must not look 
to us in vain. 



LORD FRENCH AND THE VOLUNTEERS. 



Gen. Sir O'Moore Creagh, V. C., county commandant of the Lon- 
don volunteer regiments, has received the following letter from Lord 
French : 

I should be glad if you would transmit to the various corps which took part 
in the parade for my inspection on the 17th instant this expression of my great 
gratification At what I saw. The 10,000 members of the Volunteer Training 
Corps who paraded made a most favorable impression upon me, not only by 
their marching and general appearance, but also by the fact that these men, by 
their voluntary presence on parade, were giving proof of their desire to serve 
their country, although they are under no actual obligation to do so. I feel sure 
that as a body they will keep up the high record which British volunteers have 
always led us to expect and which has culminated in their splendid perform- 
ances in the present war. 



[The Times, London, June 22, 1916, pp. 9, 10.] 

The Economic Pact, 
mr. hughes on the future — lessons of the conference. 

[By our Parliamentary correspondent.] 

Great satisfaction was expressed on all sides in the lobby of the 
House of Commons yesterday with the recommendations of the 
economic conference of the allies. The recommendations go further 
than most practical politicians had thought possible, from the ex- 
tremely guarded references to the conference made by British min- 
isters before it began its sittings in Paris. The general feeling after 
the event was that the recommendations formed a sound and scientific 



52 TRADE AGREEMENTS ABROAD. 

weapon for meeting Germany on the best possible terms in the 
economic sphere. 

The recommendations which was accepted as the most vital of all 
was that denying to the enemy powers, for a period to be fixed by 
agreement, of "most-favored-nation" treatment. Next in impor- 
tance were taken to be the recommendations providing for the main- 
tenance of essential industries in the allied countries and for differ- 
entiation against Germany. A fourth and equally important result 
of the conference, implied rather than specifically stated, was the 
need for the immediate economic organization of the British Empire 
to enforce the decisions agreed to by Mr. Hughes and Sir George 
Foster as well as hj Lord Crewe and Mr. Bonar Law. 

Members who laid emphasis on the value of the " most- favored- 
nation" recommendation expressed the view that it struck at the 
heart of the German fiscal system. A satisfactory feature of the con- 
ference from the British point of view was the refusal of the dele- 
gates to have anything to do with the unscientific policy of prohi- 
bition which has caught the fancy of some English Liberals during 
the war. 

Rigid free traders were somewhat alarmed at the tendency of the 
more drastic recommendations. There is no movement as yet to 
challenge the new policy which Britain has adopted in concert with 
her allies, but there is little doubt that a full debate will take place 
in the House of Commons in the course of the next few weeks. 

Satisfaction in France. 

a new industrial era inaugurated. 

[From our own correspondent.] 

Paris, June £1. 

The decisions taken by the economic conference and published to- 
day create widespread satisfaction. It is generally felt that a new 
era in the industrial and economic life of Europe has been inaugu- 
rated and that the incubus of German commercial hegemony, which 
to many seems more formidable, because more insidious, than the 
menace of the " mailed fist," is destined to certain downfall. 

The prevailing note in the press comment is that, although the 
allies had not known how to prepare for war, history will show that 
they knew how to prepare for peace, which is even more important. 
The extreme optimism of some writers, one of whom declares that 
" the economic United States of Europe is now founded," is tempered 
by the more prudent spirits, who emphasize the fact that it is not 
sufficient to make resolutions if all the facilities for putting them in 
practice are not actively developed. 

Thus M. Jean Herbette, in the Echo de Paris, warns his readers 
that mere defensive measures are not sufficient to paralyze German 
competition. He recalls the fact that the British blockade in the time 
of Napoleon was the cause of beet sugar successfully superseding 
imported cane sugar, and points out that the Germans are already 
busy devising substitutes for the articles of which the allies have 
deprived them. 

It is necessary, the writer urges, that the allies, and especially 
France, should be supplied with the legislation essential for putting 



TEADE AGKEEMENTS ABEOAD. 53 

the resolution adopted by the conference into practice. " The value 
ot our agreements," he observes, " will be in proportion to the value 
of our laws and methods of government." 

FRENCH PRESS COMMENT. 

Paris, June 21. 

The Journal says that the resolutions of the conference, adopted in 
the midst of hostilities, form one of the most important historical 
events of the war. 

The Temps in a leading article says : 

The realization of this program will certainly not be reached without diffi- 
culties, and the solidarity which is sought after will only be established if 
among the allies the interest of all prevails as it has prevailed during the con- 
ference. 

In an interview M. Clementel, the president of the conference, said 
that nothing struck him more than the eager desire of the delegates 
of each country to give way on minor points so as to facilitate the 
general agreement. He made it clear that the resolutions passed by 
the conference were not mere empty words, but represented a deter- 
mination to act from the present moment and not to cease until the 
end desired was reached. 

M. Clementel, in conclusion, significantly remarked, " We were 
not ready for war; we must be ready for peace." (Renter.) 

Mr. Hughes on Coming Changes. 

call for action. ' 

Mr. W. M. Hughes and Sir George Foster, who have just returned 
from the economic conference in Paris, were the chief speakers at 
a Mansion House meeting yesterday afternoon, which had been ar- 
ranged by the British Empire Producers' Association. Both spoke 
of the work of the conference, and Mr. Hughes said that the adoption 
by the allied powers of the resolutions w^iich were passed would 
effect little short of an economic revolution. 

The lord mayor presided at the meeting. Among those present 
were: Lord Halsbury, Lord Islington, Lord Desborough, Lord 
Grey, Lord Avebury, Lord Brassey, Lord Rotherham, Lord Shaftes- 
bury, Lord Faringdon, Lord Devonport, Lord Channing, Sir George 
Perley (high commissioner for Canada), Mr. Andrew Fisher (high 
commissioner for Australia), the Hon. T. J. Ryan (premier of 
Queensland), Sir Edward Goulding, M. P., Sir Joseph Lawrence, 
Sir K. Anderson, Sir Howard Frank, Sir A. Lawley, Sir T* Mac- 
kenzie (New Zealand), Sir Maurice Levy, M. P., Sir P. McBride 
(Victoria), Sir J. McCall (Tasmania), Col. Sir J. R. Parkington, 
Mr. C. Sandbach Parker (chairman of the British Empire JPro- 
ducers' Association), the lord mayor of Birmingham (Mr. Neville 
Chamberlain), and representatives of industry from all parts of the 
United Kingdom. 

Mr. Hughes expressed his pleasure at addressing a conference 
which stood, as far as any could, for the feeling of industrial Britain 
to-day. The resolutions of the Paris conference, he said, gave official 
recognition to the great j)rinciple that the relations between trade 



64 TRADE AGREEMENTS ABROAD. 

and commerce and national safety are so intimate that they must be 
treated as inseparable parts of the whole. It would have been well 
had this great fundamental truth been recognized long ago, for 
failure to do so brought the British Empire within an ace of de- 
struction. It was well that the people should recognize the peril 
which they had almost miraculously escaped. For there were still 
people in Britain to-day who for one reason or another stood more 
or less openly for a reversion after the war to things as they were 
before the war. 

I said when I first came to England [Mr. Hughes continued], and 
I say on the eve of my departure, that we ought not to underrate the 
influences at work. They want to renew what they euphemistically 
term " our friendly relations with Germany " after the war. Well, 
we do not intend that they shall be renewed [cheers] , and I believe 
the overwhelming majority of the people of Britain are behind us. 
I speak with positive assurance when I say Australia is resolutely 
determined that these relations shall not be renewed. [Cheers.] 
Australia has given an earnest of her purpose. We have not asked 
ourselves whether it would pay Australia from a commercial point 
of view to take any particular steps giving effect to this policy, but 
only whether it was necessary or desirable in the interests not merely 
of Australia but of the Empire, And can there be any doubt that 
this consideration and this alone should guide our every step at this 
juncture? It not only should, but must, do so. The people must 
insist upon it. 

GERMAN ECONOMIC DOMINATION. 

Very different considerations have served in the past. It is these 
that expose the basic motives of many of those who openly or secretly 
oppose the organization of British industry. What they really mean 
when they say that it will be suicidal for England not to allow 
Germany to dump her goods into Britain after the war is that it 
will affect their pockets. And though, of course, very many who 
think it would seriously affect their interests are quite mistaken, 
all are not so. For there are people in Britain who would suffer 
very materially from the change from an economic system which 
ignores the welfare as well as the safety of the nation to one which 
regards these things as the foundations upon which it must rest. 
Many of these men during the war are caretakers of Germany's 
interests in Britain. They are integral parts of the great German 
organization. Naturally the German economic domination of the 
world would have been impossible had her organization not included 
many of the influential citizens of the country upon whose vitals 
she was feeding, who acted, though in many cases they did not per- 
haps realize the fact, as the instruments, the tools, of Germany. 
These persons, who were as much part of the warp and woof of the 
great German organization as those who lived in Germanj^ itself, 
in many cases found opportunities for great profit. They view with 
the utmost apprehension the suggestion that Britain should organize 
her industries and thus slam the door upon their hopes. Of course, 
they are very careful to cloak their real motives under a cloud of 
high-sounding words. 

I do not for a moment include all those who oppose the coming 
change — for it is coming — among those persons. Many are slaves 



TEADE AGREEMENTS ABROAD. 55 

to mere doctrine, others are the dupes of designing and interested 
persons. ^Ye have to deal with all these, but the only opposition we 
need fear is that whose roots are embedded in German gold. We 
have not only to fight the Germans in Germany, but the agents of 
Germany in Britain. " National welfare and national safety " is 
the motto we have blazoned on our banner. And under it, if we but 
fight with resolution, we shall conquer. 

There is much to be done and very little time in which to do it. 
I do not think it is too late to act now, but most emphatically 
I think that nothing but immediate, united, resolute, and sys- 
tematic effort will suffice. For this reason I rejoice that this con- 
ference has met here to-day, and I hope you will agree to band your- 
selves together for this great purpose, for all your interests hang 
upon it. 

PARIS CONFERENCE RESOLUTIONS. 

Where are we to begin? I think at the resolutions of .the Paris 
conference. We should approve them by bending our every effort 
to give effect to them without delay. Their adoption by the allied 
powers will effect little short of an economic revolution. I believe 
that through them we can strike a blow right at the heart of Ger- 
many. I believe that, rightly used, they are a great charter guaran- 
teeing us and the allied nations, and indeed the civilized world, 
economic independence. And that is what we desire; what we are 
entitled to; and what we are determined to get. It would be intol- 
erable if after we had sacrificed millions of lives and thousands of 
millions of treasure in order to prevent Germany from imposing her 
political will upon us we should slip back into her economic maw. 

There are millions of soldiers who will return from the war, and 
a million of others engaged in making munitions; added to these 
are the men now employed who, before the war, could not find 
employment ; and that great army of women, now working so splen- 
didly, who before the war were not a factor in the economic prob- 
lem. Are you going to tell the men who fought and saved the 
Empire that there is no place for them, or at best no place worthy 
of them? Are you going to turn those adrift who are now car- 
rying on the work of the country, those who in many cases were 
unemployed before the war? And what are you going to do with 
the million of women who are now doing the work of men ? What 
a tremendous problem ! How complex, how difficult ! Yet at all 
hazards we must find a solution or face a situation not less disastrous 
than the war itself. 

FIGHT FOR THE WORLD's MARKETS. 

Then we have to prepare to meet the demand for machinery, ships, 
goods of all kinds which have either been destroyed by the war or 
which could not be manufactured during the war. We have to re- 
tain our hold on the sea-carrying trade, and to dispose of our 
products in the markets of the world. The central powers have 
recently entered into a very close economic alliance, and Germany 
IS using all its genius for organization to make it effective. Then 
the neutral nations, growing rich while we grow daily poorer, are 



56 TEADE AGREEMENTS ABEOAD. 

making great preparations to capture the "svorkrs markets and oust 
ITS from our position. All these things confront us. "We must face 
them and we must master them. And I am quite sure we can do 
so if we but go the right way to work. 

The only possible solution of the great problem lies in organiza- 
tion. We must not onlj^ put energy into the work, but brains; the 
best brains of the country. And we must call science to our aid. 

The material basis of every industry is its raw material. With- 
out this, industry is helpless. The Paris conference sets out the 
position in one of its resolutions. Common sense and our own bit- 
ter experiences have made us realize how vital to national safety 
and welfare the raw materials of our basic industries are. We have 
seen what the conrtol of dyes, tungsten, spelter, and other metals 
by Germany means to this nation. It is profoundly true that if 
one great power controlled practically all the supplies of such 
things as copper, lead, zinc, tungsten, petrol, rubber, and cotton, all 
tJie world would be suppliant at its feet. We do not want to con- 
trol the world's supplies of raw materials, but we must control 
enough for our own national and economic purposes. And we must 
try to broaden the base of our industrial pj^'amid by extending 
the scope of our agricultural industries. 

In my recent tour along the front in France I did not see as much 
land uncultivated as you may see within 10 miles of London. The 
French nation is rooted in the soil of France; that is the secret of 
its great strength. You must cultivate the lands of Britain; create 
such conditions as will induce men to follow agriculture. 

I come now to the very foundation of national safety and national 
greatness. The real strength of a nation lies not in material wealth 
or amount of trade or extent of territory, but in the number and 
quality of its men and women. And so this new economic edifice 
must rest upon the solid and enduring foundations of such condi- 
tions for the great masses of the people as will ensure not merely 
a numerous but a virile population. This involves the payment 
of such a fair and reasonable wage as will enable a man to marry 
and rear a family in a state of comfort, compatible with a high 
standard of civilization. 

ECONOMIC TIES OF EMPIRE. 

As we are citizens of a great Empire we ought not, in the great 
work that is before us, to forget to do all things possible to strengthen 
the economic ties that bind the various part of the Empire together. 
For in unity lies our strength. The raw materials in which our Em- 
pire abounds should be developed and made available for all our 
needs. I hope that the proposal for supplying the spelter require- 
ments of Great Britain from Australian concentrates which I had 
the honor to lay before the British Government will be adopted. I 
hope that they will agree to support the proposal of the British 
Empire Producers' Association, which provides for growing within 
the Empire the sugar consumed therein. It provides for the exclu- 
sion of German beet sugar, favorable treatment for our allies, and 
preference for goods produced within the Empire. It is a project at 
once imperial in scope and practicable. 



TEADE AGREEMENTS ABROAD. 57 

I am very sure that in these as in other things necessary to give 
effect to the resokitions of the Paris conference and to build up a new 
Britain in which economic welfare goes hand in hand with national 
security, we shall have the whole-hearted support of the great major- 
ity of the people of Britain. 

Let our motto be "Action, action, and always action." There is 
much to be done. Do not let us mistake words for deeds, nor think 
that all is very well ; that time is with us and the allies. Let us realize 
that Germany is a great nation, that she will never yield until she is 
decisively beaten on the field of battle, that as she realizes that with 
defeat her cherished dreams of world empire must be forever shat- 
tered and in their place come a horrid reality of economic chaos, of 
revolution, in which dj^nasties shall topple to their fall, she will fight 
to the end on the field of battle, and on that of trade, with all the 
tremendous power springing from perfect national organization. 
Nothing short of a resolution as determined as her own, an organiza- 
tion as complete as hers, will enable us to conquer on both fields. Let 
us all vow to regard this great work of national organization as a 
sacred duty, holding its heaviest labors as a glorious privilege, for 
upon the success of our efforts rests not only the future of Britain 
but of the entire British race. [Loud cheers.] 

SIR GEORGE FOSTER ON UNITY. 

Sir George Foster, minister of trade and commerce in Canada, said 
that the thing which pleased him most about the economic conference 
was the spirit manifested of self-sacrifice of personal or national in- 
terests in order that the common good might be achieved. This was a 
lesson taught by the war. We did not become effective against the 
Germans until the allied forces and nations and directions came to- 
gether and worked in unity one with the other. This was in war, l3ut 
what was war compared with peace ? War was a temporary calamity, 
but the days of peace were forever. 

The basic spirit of the conference was that until the allied powers 
had broken the strangle-hold of Germany and made themselves in- 
dependent, and until they had mingled their commerce and economic 
blood together as they had mingled their blood on the battlefield, they 
had not done their complete duty. So it was that this spirit of self- 
sacrifice brought about the resolutions which had been published that 
morning and which were carried unanimously by the conference. 



fTbe Economic World, New York, July 1, 1916.] 

THE MILITANT ECONOMIC PROGRAM OF THE ENTENTE ALLIES. 

[By Arthur Richmond Marsh.] 

It is apparent from the great majority of the opinions expressed in 
American newspapers with respect to the militant economic program 
decided upon by the entente allies at their recent conference in 
Paris, that the impression produced in this country by the program— 
or so much of it as is known with particularity from the cabled dis- 
patches—has not been altogether happy. The fact is appreciated 



58 TRADE AGREEMENTS ABROAD. 

here, of course, that at this distance there is necessarily much uncer- 
tainty and obscurity about what was actually done at the conference 
and what the deeper and more permanent purposes are that found 
formulation in the decisions arrived at as a result of its deliberations. 
Even the full text of the resolutions adopted, made public on this side 
of the Atlantic on Monday last, leaves us much in the dark about these 
matters; for the terms of the resolutions are general rather than 
specific in character and, obviously with intention, outline only 
vaguely and without declaration of practical details the economic 
policy or policies to be carried out by the respective allied Gov- 
ernments, especially after the war is concluded. In fact, it is diffi- 
cult for us to discern from the resolutions themselves precisely in how 
far the program is in reality to be primarily a war measure, designed 
to spread irmnediate discouragement in enemy populations already 
solicitous about their economic future, and in how far it represents 
settled conviction on the part of its authors with regard to a course 
of action to be entered upon definitely and to be pursued unswerv- 
ingly for an indefinite period of time hereafter. 

Interpreted by the letter as it is stated in the resolutions, however, 
and with merely the aid of such collateral information about it as 
we have received, the program has undoubtedly both startled the 
great majority of Americans by reason of its apparent combination 
of grandiosity and relentless severity, and also excited in them a large 
degree of skepticism about its practicability on the one hand, and its 
propriety on the other. From the point of view of American first 
impressions, what seems to emerge from the available facts is a de- 
termination of the nine European countries which now constitute the 
entente alliance to initiate and to maintain even in the distant future 
a state of economic warfare against the Teutonic powers, as reso- 
lutely hostile in its purpose and as destructive in its deeper effects as 
is the existing military and naval warfare. In order that Germany 
and Austria — particularly the former — may be adequately punished 
for having plunged Europe into war ; in order that the frightful con- 
sequences to themselves of the wanton action of these powers may 
serve as an example for other nations through all time ; in order that 
the Germans and Austrians may be deprived of all hope of a reestab- 
lishment within foreseeable years of their dangerous strength and 
aggressive initiative — in order, we say, that these ends may be at- 
tained, the program as read by Americans seems to propose that there 
shall be formed over against the offending peoples an association of 
nations, embracing in the totality of their home countries, dominions, 
dependencies, and colonies not far from one-third of the human race; 
and that the prime object of this association of nations shall be to 
keep the populations of Germany and Austria forever at an economic 
disadvantage and to prevent the fresh upbuilding of that wealth 
which has served as the basis of their political ambitions and efforts. 
Far more is thought to be contemplated than a Zollverein, even 
though the most extensive that mankind has ever known, from which 
Germany and Austria are excluded ; for there is in the program more 
than a hint of measures, both economic and politico-economic, much 
more far-reaching in their effects than any mere tariff system, with 
its expedients of preferential duties and the like, can possibly be 
made to be. The very structure and organization of the economic life 
of Germany and Austria appear to be aimed at, in so far at least as 



TEADE AGEEEMENTS ABEOAD. 59 

that life touches the outer world. There is even some suggestion of 
indirect control over the economic relations of these countries Avith 
European and non-European nations which are neutrals in the pres- 
ent contest. 

It is undeniable, we think, that more than one phrase — and perhaps 
the general tenor of the whole— of the text of the resolutions embody- 
ing the economic plan of the entente allies lends a certain amount of 
justification to the interpretation just given of the purposes behind 
the plan. It would not be correct, to be sure, to attach too much im- 
portance in this regard to the measures directed against Germany 
and Austria in the first two of the three grand subdivisions into 
which the resolutions fall ; for the first of these subdivisions is con- 
cerned only with matters having to do with the prosecution of the 
war and the second deals with the avowedly transitory economic 
necessities involved in the restoration to their former prosperous 
state of the countries or parts of countries of the entente allies that 
have been occupied and despoiled by the Teutonic enemy, i. e., Bel- 
gium, Servia, northern France, western Russia, and Poland. It is in 
the third subdivision of the resolutions alone that are found the 
"permanent measures of mutual aid and collaboration between the 
allies," which are counted upon to prevent an economic risorgimento 
of the Teutons after the war, or any possibility of the attainment by 
them through economic means of what they have failed to gain by 
arms. Here it is that we discover intimations of the lengths to which 
the entente allies are prepared to go. Preferential and mutually 
favorable tariffs they wHi employ to such extent as may be required ; 
but beyond these they have in mind recourse to the widest possible 
range of economic expedients. They will take without delay such 
steps as are necessary to " rid themselves of dependence upon enemy 
countries as regards raw materials and manufactured articles which 
are essential to the normal development of their economic activity." 
They will insure for themselves absolute independence in all matters 
"touching the financial, commercial, and maritime organization." 
They will " adopt such means as seem to them most approiDriate 
according to the nature of the merchandise and following the prin- 
ciples which govern the economic policies." In order to promote 
their common trade they " engage to take measures to facilitate ex- 
change thereof — i. e., of their products — as much by the establish- 
ment of direct and rapid services of transportation by land or sea at 
reduced rates as by the development and amelioration of postal, 
telegraph, and other communications." They will adopt common 
measures with respect to patents, trade-marks, copyrights, and the 
like. And to cap the whole, " Especially they may have recourse 
to subsidized enterprises under the direction or control of the Gov- 
ernments themselves, or to payment to encourage scientific and tech- 
nical researches, the development of industries and natural resources, 
or to customs tariffs, or to temporary or permanent prohibitions, or 
even to a combination of these various means." 

On the face of the matter, no international economic project so 
vast as this in scope, or indeed even remotely comparable with it, 
has ever been undertaken in recorded history; and, more than this, 
the very conception of such a project, permanently inimical in its 
ostensible objectives to two of the greatest of the nations of the 



'^60 TEADE AGREEMENTS ABROAD. 

world, is utterly novel. There have been in the past, of course, 
numberless bitter rivalries, economic as well as political, between 
great peoples on the globe ; but there is no previous instance, so far as 
we can remember, of the employment of every conceivable economic 
means by one rival or group of rivals for the incessant and in- 
definitely prolonged impairment of the economic forces of its antago- 
;nist or antagonists. 

It is here that American critics of the allies' program find them- 
rselves most at variance with its apparent implications. To begin 
with they argue that there is almost something contrary to nature 
itself in undertaking to deprive some hundred and twenty-five 
millions of people — the population of Germany and Austria to- 
gether — of a considerable part of the fruits of their labor and skill, 
particularly when these people have succeeded in making themselves 
among the most expert, if not actually the most expert, in many de- 
partments of modern economic effort, of all the people in the world. 
Modern society, they say, is bound together by indissoluble ties of 
neutral economic interest ; the world at large needs the results of the 
economic efforts of the Germans and Austrians as much as the Ger- 
mans and Austrians need the patronage of the world at large; and 
it is beyond the power of human governments to impose permanent 
restraints upon economic interchanges that have such vast mutual 
benefits as sanctions. The scheme, then, is in its essence imprac- 
ticable. But, more than this, it is contrary to the highest interests of 
mankind; for the greatest of the desiderata in the world is general 
peace, not merely political peace but economic peace. In fact, the 
argument runs that without economic peace there can be no endur- 
ing political peace ; and the very carrying out of the allies' economic 
purposes must within no long period of time entail the recrudescence 
of all the horrors of war. Accordingly mankind as a whole should 
set its face against the prosecution of any such program, and es- 
pecially should the neutral nations of the earth do this, since none 
can foresee the incalculable consequences to which they, too, may be 
exposed through the inevitable bitter contentions to which the pro- 
gram will give rise. 

We have set forth thus at length, and as forcefully as we could, 
the tendency of first thinking in the United States with regard to the 
results of the Paris conference of the entente allies, though we are 
hj no means sure that the deductions referred to are absolutely 
justified. It need not be denied that the resolutions adopted at the 
Paris conference are so cast as to warrant to some extent the inter- 
pretation that they are designed to embody measures of permanent 
warfare. Under the circumstances of their formulation little else 
could be expected. And yet we are far from convinced that the 
fundamental intentions of the nations composing the entente alliance 
are so extreme as the resolutions make them appear. We do not 
believe that a state of economic war a outrance against the indus- 
trious and productive populations of Germany and Austria is what 
is really contemplated. 



RESPONSE OF THE PRESIDENT RECEIVED IN THE SENATE AT 
THE CONCLUSION OF THE FOREGOING PROCEEDINGS. 

[S. Doe. 490, 64th Cong., 1st sess.] 

TRADE AGREEMENTS ABROAD. 

MESSAGE 

FEOM THE 

PRESIDENT OF THE UNITED STATES, 

TRANSMITTING, 

IN RESPONSE TO A SENATE RESOLUTION OF JUNE 29, 1916, A COM- 
MUNICATION FROM THE SECRETARY OF STATE SUBMITTING A 
REPORT AS TO THE CHARACTER, FORM, AND PURPOSE OF THE 
AGREEMENT CONCLUDED BY THE ALLIED NATIONS AT PARIS 
REGARDING THEIR FUTURE JOINT AND SEVERAL INDUSTRIAL 
AND COMMERCIAL INTERESTS. 



July 7 (calendar day, July 10), 1916. — Ordered to be printed. 



To the Senate of tlie Unired States: 

In response to the resolution of the Senate of June 29, 1916, request- 
ing the President to obtain information, as far as possible, as to the 
character, form, and purpose of the agreement or treaty concluded by 
the allied nations at Paris regarding their future joint and several 
industrial and commercial interests, I transmit herewith a report of 
the Secretary of State furnishing the information requested so far as 
it is now in the possession of the Department of State. 

WooDRow Wilson. 

The White House, 

WasMngton, July 10, 1916. 

61 



The President: 

The undersigned, the Secretary of State, to whom was referred by 
your direction the resolution of the Senate of the United States dated 
June 29, 1916, and reading as follows: 

\VTiereas it has been widely stated in the public press that a conference was recently 
held in Paris, France, by authorized representatives of several of the Govemmenta 
of leading industrial and commercial nations of Europe, now engaged in the Euro- 
pean War as allies of France, with the object and purpose of arriving at an agree- 
ment between them with respect to their future joint and several industrial and 
commercial interests; and 
Whereas it is also similarly stated that a commercial treaty was entered into at said 
conference between France, Great Britain, and other allied countries, which treaty 
it is alleged is now being drafted and is to become operative after the end of said 
war, with the declared object and p\u"pose of establishing a boycott against the 
enemies of the high contracting parties to said treaty, both during the war and 
after the war, and also to promote commercial independence from the central 
powers; and 
Whereas in a statement relating to said treaty, issued by the British Board of Trade, 
published in the American press, it is stated, among other things, that "The allies 
declare their common determination to insure the reestablishment of countries 
suffering from acta of destruction, spoliation, and unjust requisition, and decide 
to join in devising means to secure the restoration of those countries by giving to 
them a prior claim on raw materials, industrial and agricultural plants and stock 
and mercantile fleets, or by assisting them in reequipping themselves in these 
respects"; * * * that "The allies are to conserve all their natural resources 
during the period of reconstruction after the war for common use"; that "In order 
to defend their commerce against economic aggression resulting from dumping or 
any other mode of unfair competition, the allies decide to fix by agreement a period 
during which the commerce of the enemy powers will be submitted to special 
treatment and the goods originating in their countries will be subjected to prohibi- 
tion or to a special regime of an effective character"; * * * that "The allies' 
mutual trade is to be fostered in every possible way"; and that "The above steps 
are to be put into operation immediately": Therefore be it 

Resolved, That the President of the United States be, and hereby is, requested to 
ascertain and send to the Senate at the earliest practicable moment exact information 
so far as that may be possible, as to the precise character, form, and full purpose of 
this agreement or treaty, especially with the view of disclosing to the Senate whether 
and to what extent neutral nations, especially the United States, may be affected 
thereby — 

has the honor to make the following statement: 

Instructions were sent by cable in June last to the American 
Embassy at Paris to study, in cooperation with the consul general, 
very carefully the deliberations of the commercial conference to be 
held in that city by the allies and to report promptly all information 
which they were able to obtain. 

The department has now received a dispatch from the American 
Embassy at Paris inclosing, with translation, the recommendations 
of the economic conference of the allies which sat in Paris from the 
14th to the 17th of June, 1916, together with a list of the delegates 
from the various countries represented. A copy of this dispatch is 
submitted for communication to the Senate if deemed appropriate. 

Respectfully submitted. 

Robert Lansing. 

Department of State, 

Washington, July 6, 1916, 
62 . . . ^ 



No. 3311. 

Paris, June 22, 1916. 
The Secretary of State, 

Washington. 

Sir: In confirmation of my telegram No. 1449, of the 20th instant, 
I have the honor to inclose herewith in copy and translation, the 
recommendations of the economic conference of the allies which sat 
in Paris on the 14th, 15th, 16th, and 17th of June, 1916, together 
with a list of the names of the delegates from the various countries 
represented. 

These recommendations apply to two separate periods — the period 
of the duration of the war and the period of reconstruction after the 
termination of hostilities. 

For the first period, the recommendations have reference to meas- 
-ures for the prohibition of trade with the enemy countries and for the 
elimination of the enemy firms in the allied countries. 

For the second period the measures adopted are designed to give the 
allied countries a prior claim on their own natural resources and to 
prevent the dumping of merchandise of enemy manufacture or origin. 

The commission also recommended permanent economic measures 
for rendering the allied countries economically, industrially, and 
agriculturally independent and for encouraging trade relations be- 
tween the allied countries by the improvement of shipping, tele- 
graphic, and postal facilities. 

I have the honor to be, sir, your obedient servant. 

For the ambassador: 

Robert Woods Bliss. 



[Translation.] 

Economic Conference of the Allied Governments. 

The representatives of the allied Governments have met in Paris, 
Mr. Clementel, minister of commerce, presiding, on the 14th, 15th, 
16th, and 17th of June, 1916, for the purpose of fulfilling the mandate 
which was confided to them by the conference of Paris on March 2S, 
1916, to put into practice their sohdarity of views and interests and 
to propose to their respective Governments suitable measures for 
reahzing this sohdarity. 

They perceive that the central powers of Europe after having 
imposed upon them their mihtary struggle, in spite of all their efforts 
to avoid the conflict, are preparing to-day, in concert with their 
aUies, a struggle in the economic domain which wiU not only survive 
the reestablishment of peace but, at that very moment, will assume 
all its amplitude and all its intensity. 

They can not in consequence conceal from themselves that the 
agreement which is being prepared for this purpose amongst their 

63 



64 TKADE AGREEMENTS ABEOAD. 

enemies has for its evident object the estabhshment of their domina- 
tion over the production and the markets of the whole world and to- 
impose upon the other countries an inacceptable hegemony. 

In the face of such a grave danger the representatives of the 
allied Governments consider that it is their duty, on the grounds of 
necessary and legitimate defense, to take and realize from now 
onward all the measures requisite on the one hand to secure for them- 
selves and the whole of the markets of neutral countries full economic 
independence and respect for sound commercial practice and on the . 
other to facihtate the organization on a permanent basis of this 
economic alhance. For this purpose the representatives of the 
allied Governments have decided to submit for the approval of their 
Governments the following resolutions : 

(a) measuees for war period. 

I. 

Laws and regulations prohibiting trading with the enemy shall be 
brought into accord; for this purpose: 

(a) The allies will prohibit their own subjects and citizens and all 
persons residing in their territories from carrying on any trade with 
the inhabitants of enemy countries of whatever nationality, or with 
enemy subjects, wherever resident, persons, firms, and companies 
whose business is controlled wholly or partially by enemy subjects- 
or subject to enemy influence, whose names will be included in a 
special list. 

(b) The allies will also prohibit importation into their territories of 
all goods originating or coming from enemy countries. 

(c) The allies will further devise means of establishing a system of 
enabling contracts entered into with enemy subjects and injurious to 
national interests to be canceled unconditionally. 

II. 

Business undertakings owned or operated by enemy subjects in 
the territories of the allies are all to be sequestrated or placed under 
control. Measures will be taken for the purpose of winding up some 
of these midertakings and realizing the assets, the proceeds of such 
reahzations remaining sequestrated or under control. In addition, 
by export prohibitions which are necessitated by the internal situ- 
ation of each of the allied countries, the allies will complete the meas- 
ures already taken for the restriction of enemy supplies both in the 
mother countries and the dominions, colonies, and protectorates: 

(1) By unifying lists of contraband and export prohibition, par- 
ticularly by prohibiting the export of aU commodities declared abso- 
lute or conditional contraband. 

(2) By making the grant of licenses to export to neutral countries, 
from which export to the enemy territories might take place, condi- 
tional upon the existence in such countries of control organizations 
approved by the allies, or, in the absence of such organizations, upon 
special guaranties, such as the limitation of the quantities to be ex- 
ported, and supervision by allied consular officers, etc. * * * 



trade agreements abroad. 65 

(b) transitory measures for the period of the commercial, 
industrial, agricultural, and maritime reconstruction of 
the allied countries. 

I. 

The allies declare their common determination to insure the rees- 
tablishment of the countries suffering from acts of destruction, 
spoliation, and unjust requisition, and they decide to join in devising 
means to secure the restoration to those countries, as a prior claim, 
of their raw materials, industrial, agricultural plant, and stock, and 
mercantile- fleet, or to assist them to reequip themselves in these 
respects. 

II. 

Whereas the war has put an end to all treaties of commerce between 
the allies and enemy powers, and it is of essential importance that 
during the period of economic reconstruction the liberty of none of 
the allies should be hampered by any claim put forward by enemy 
powers to most-favored nation treatment, the allies agree that the 
benefit of this treatment will not be granted to those powers during 
a number of years to be fixed by mutual agreement among themselves. 

During this number of years the allies undertake to assure each 
other, so far as possible, compensatory outlets for trade in case con- 
sequences detrimental to their commerce should result from the appli- 
cation of the undertaking referred to in the preceding clause. 

III. 

The allies declare themselves agreed to conserve for the allied 
countries, before all others, their natural resources during the whole 
period of the commercial, industrial, agricultural, and maritime 
reconstruction, and for this purpose they undertake to establish 
special arrangements to facilitate the interchange of these resources. 

IV. 

In order to defend their commerce and industry and their agri- 
cultm'e and navigation against economic aggression, resulting from 
dumping or any other mode of unfair competition, the allies decide 
to fix by agreement a period of tim^e during which commerce with 
the enemy powers will be submitted to special treatment and goods, 
originating from their countries, will be subjected either to prohi- 
bitions or to a special regime of an effective character. The allies 
will determine by agreement through diplomatic channels the special 
conditions to be imposed during the above-mentioned period on the 
ships of enemy powers. 

V. 

The allies will devise measures to be taken jointly or severally for 
preventing enemy subjects from exercising in their territories certain 
industries or professions which concern national defense or economic 
independence. 

S. Doc. 491, 64-1 5 



66 TRADE AGREEMEj^TS ABROAD. 

(c) PERMANENT MEASURES OF MUTUAL ASSISTANCE AND COLLABORA- 
TION AMONG THE ALLIES. 



The allies decide to take the necessary steps without delay to render 
themselves independent of enemy countries in so far as regards raw- 
materials and manufactured articles essential to the normal develop- 
ment of their economic activities. These measures will be directed 
to assuring the independence of the allies, not only so far as concerns 
sources of supply, but also as regards their financial, commercial, and 
maritime organization. The allies will adopt such measures as seem 
to them most suitable for the carrying out of this resolution acccord- 
ing to the nature of the commodities and having regard to the prin- 
ciples which govern their economic policy. They may, for example, 
have recourse to either enterprises subsidized and directed or con- 
trolled by the Governments themselves or to the grant of financial 
assistance for the encouragement of scientific and technical research 
and the development of national industries and resources, or to cus- 
toms duties or prohibitions of a temporary or permanent character, 
or to a combination of these different methods. 

Whatever may be the methods adopted, the object aimed at by the 
allies is to increase the production within their territories as a whole 
to a sufficient extent to enable them to maintam and develop their 
economic position and independence in relation to enemy countries. 

II. 

In order to permit the interchange of their products, the allies 
undertake to adopt measures facilitating mutual trade relations, both 
by the establishment of direct and rapid land and sea transport serv- 
ices at low rates, and by the extension and improvement of postal, 
telegraphic, and other communications. 

III. 

The alUes undertake to convene a meeting of technical delegates 
to draw up measures for the assimilation, so far as may be possible, 
of their laws governing patents, indications of origin and trade-marks. 
In regard to patents, trade-marks, literary and artistic copyi-ight, 
which come into existence during the war in enemy countries, the 
allies will adopt, so far as possible, an identical procedure to be 
applied as soon as hostilities cease. This procedure will be elabo- 
rated by the technical delegates of the allies. 

(D) 

Whereas for the purpose of their common defense against the 
enemy, the allied powers have agreed to adopt a common economic 
policy on the lines laid down in the resolutions which have been 
passed and, whereas it is recognized that the effectiveness of this 
policy depends absolutely upon these resolutions being put into 
operation forthwith, the representatives of the allied Governments 
undertake to recommend that their respective Governments shall 



TEADE AGREEMENTS ABROAD. 67 

take, mthout delay, all the measures, whether temporary or per- 
manent, requisite to giving full and complete effect to this policy 
forthwith, and to communicate to each other the decisions arrived 
at to attain the object. 
Paris, June 17, 1916. 

Have signed these resolutions: 

For France : 
M. E. Clementel, Ministre du Comm<&rce et de I'lndistrie. 
M. G. Doumergue, Ministre des Colonies. 
M. M. Sembat, Ministre des Travaux Publics. 
M. A. Metin, Ministre du Travail et de la Prevoyance Sociale. 
M. J. Thierry, sous-Secretaire d'Etat de la Guerre (Service de 
ITntendance) . 

M. L. Nail, Sous-Secretaire d'Etat de la Marine (Marine Mar- 
chande) . 

M. J. Cambon, Ambassadeur de France, Secretaire general du 
Ministere des Affaires etrangeres. 

M. A. Masse, Secretaire General du Ministere de I'Agriculture. 
M. J. Branet, Directeur General des Douanes. 
M. P. de Margerie, Ministre Plenipotentiaire, Directeur des Affaires 
Politiques et Commerciales au Ministere des Affah'es etrangeres. 
For Belgium: 
M. de Broqueville, President du Conseil, Ministre de la Guerre. 
M. le Baron Beyens, Ministre des Affaires etrangeres. 
M. van de Vyvere, Ministre des Finances. 
M. le Comte Goblet d'Alviella, Mernbre du Conseil des Ministres 

For Great Britain: 
M. le Marquis de Crewe, Lord President du Conseil prive. 
M. A. Bonar Law, Ministre des Colonies. 
M. W. M. Hughes, Premier Ministre d'Australie. 
Sir George Foster, Ministre du Commerce du Canada. 

For Italy: 
S. Exc. M. Tittoni, Ambassadeur d'ltalie a Paris. 
M. Daneo, Ministre des Finances. 

For Japan : 
M. le Baron Sakatani, Ancien Ministre des Finances. 

For Portugal : 
M. de Docteur Alfonso Costa, Ministre des Finances. 
M. le Docteur Augusto Soares, Ministre des Affaires etrangeres. 

For Russia: 
M. Pokrowsky, Controleur de I'Empire, Conseiller prive. 
M. Prilejaieff, Adjoint au Ministre du Commerce et de Tlndustrie, 
Conseiller prive. 
For Servia : 
M. Marinkovitch, Ministre du Commerce. 

The following persons, who are diplomatic representatives of the 
allied countries in Paris, have been appointed as a permanent com- 
mittee of the economic conference: 
Belgium : 
M. G. Peltzer, vice president of the Union Economique Beige. 

France : 
M. Denys Cochin, minister of state, president of the committee. 
M. Gout, minister plenipotentiary, under secretary of the foreign 
office. 



68 



TRADE AGREEMENTS ABROAD. 



020 m 005 



Contre Amiral Amet, vice president of the committee. 

Italy: 
Prince Ruspoli, minister plenipotentiary, Italian Embassy in Paris. 
Commandeur del Abbadessa, assistant general director of the cus- 
toms. 
Col. Brancaccio. 

Japan: 
Tatsuke, comiseUor of the Japanese Embassy in Paris. 

Great Britain : 
Earl GranviUe, comiseUor of the British Embassy in Paris. 

Portugal : 
M. de Vilhena. 

Russia: 
Sevastopoulo, counsellor of the Russian Embassy in Paris. 
Batchen, commercial attach^ at the Russian Embassy in Paris. 

Servia: 
Voulovitch, deputy. 
Kapetanovitch, deputy. 

General secretary: 
Bosseront d'Anglade, minister plenipotentiary. 



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